Estate agents

The OFT publishes new guidance on what constitutes estate agency work for the purposes of the Estate Agents Act.

23 September 2004

OFT publishes guidance on buying and selling a home.

22 July 2004

The Government response to our estate agency report can be found on the Department for Business, Enterprise and Regulatory Reform website.

23 March 2004

The OFT study into the estate agency market in England and Wales has concluded that the Estate Agents Act requires modernising and that consumers want a better service.

The report recommends changes to the law, improved self-regulation and calls on consumers to take action themselves. The OFT will also launch a consumer information campaign in the spring to raise awareness of the savings that can be made by comparing prices between estate agents and negotiating on fees.

Download Estate agency market in England and Wales (pdf file 544 kb)

The report's annexes can be downloaded below. 

Findings

Legislative changes
Both the OFT and trading standards departments consider that they are restricted in taking enforcement action in this sector by limitations in the Estate Agents Act.

The study recommends amending the Act so that:

• it is made more enforceable to allow more effective and proportionate action to be taken to address breaches of the legislation
• it is clear that it covers new ways of buying and selling property
• statutory terms used in estate agency contracts are made easier for consumers to understand.

Improving self-regulation
One fifth of sellers and a quarter of buyers said they had experienced a serious problem with an agent and many were able to identify specific practices.

The report argues that the high level of consumer dissatisfaction shows the need for estate agents to improve their standards of customer service. In addition, wider access to low cost, independent redress needs to be available to both buyers and sellers.

The OFT recommends better and more widespread self-regulation in the sector, with effective consumer codes of practice; code sponsors should also apply for approval under the OFT's Consumer Codes Approval Scheme.

If voluntary codes of practice do not achieve the desired results, the case for a statutory scheme should be considered.

Competition
The report finds no obvious structural competition problems in the market, as it is dynamic with a large number of new agents setting up and established businesses leaving the market due to competitive forces.

However, there is limited price competition, and less than half of sellers got more than one quote. Those who did shop around and negotiated paid, on average, 14 per cent lower – a saving of more than £300 on the current average price of a property.

The report recommends:

• sellers shop around between estate agents and negotiate on fees
• estate agents provide – and sellers request – fees quoted both in percentage terms and an absolute figure. This should also be a requirement under any code of practice adopted by the sector.

See press release

Annexes  

Download Annexe A - Consumer survey (pdf 245 kb)
Download Annexe B - Business survey (362 kb)
Download Annexe C - International survey (781 kb)
Download Annexe D - Case studies (93 kb)
Download Annexe D - full version - Case studies (1.68 mb)
Download the academic paper - Microeconomic Assessment of the Home Buying Offer and Contract Process (441 kb)

Background

Announcement of study - see press release

Further information

If you are buying or selling your home, useful information and advice can be found in the Consumer information section of this website.

Complaints about estate agents

Make a specific complaint that an estate agent has breached the Estate Agents Act.

Back to: Completed market studies