New regulation of agents confirmed by government

Proper regulation of property agents could be a welcome step, but it needs to tackle the practices buyers actually encounter. I still hear of buyers being made to feel that their offer will only be taken seriously if they use the estate agent’s mortgage broker. Buyers should be free to choose their own adviser without pressure. Clear standards, an effective complaints process and meaningful enforcement would make this far more than a licensing exercise.

Property is too important, and too expensive, for consumers to discover after the event that the person managing millions of pounds of homes faced fewer barriers to entry than many regulated professions.

Licensing, qualifications and the power to remove bad actors could raise standards, but regulation only works if enforcement has teeth.

For leaseholders, the biggest potential benefit is accountability. Managing agents can influence service charges, major works, insurance and the day-to-day running of a building. When that goes wrong, the financial consequences can be huge.

A regulator will not magically make every service charge fair, but clearer standards, proper complaints handling and the ability to sanction firms should make it harder for poor practice to hide behind complexity.

The real test is simple: will leaseholders feel they finally have somewhere effective to go when things go wrong?

Regulation of Estate Agents is long overdue but also been on the table for a number of years. Many agents lack real knowledge and experience of, what is in most cases, the most expensive asset people will buy- it mustn't be taken lightly. We see a lot of misinformation and manipulation for agents' own benefits as well as flouting the guidelines and legislation already in place. The only caveat is that, with any regulation, it is only as good as the monitoring.

The real test for any new regulation won't be the licence or qualification itself, but what happens when standards slip. Good agents already invest heavily in training, complaints handling and client care, so the system needs to distinguish between firms doing that properly and those that aren't, rather than simply adding cost and paperwork across the board.

For leaseholders, clearer accountability around fees, complaints and poor management could make a real difference, but only if consumers know who to turn to and there are meaningful consequences when standards aren't met. The detail on enforcement will matter far more than the headline.

Leaseholders are now left on tenterhooks, begging for a cap on excessive fees. High charges and punitive fees mean leaseholders are in the midst of uncertainty and some in negative equity, its especially difficult for those with the burden of equity loans. Consultation could offer a viable solution for many owners in unsuitable and unsellable property.
Property agents should have evolved by now, into the profession that it could be, yet sadly, if you were to compare with healthcare such as a surgeon, in some cases they are little more than body snatchers. Proper regulation is needed for an industry riddled with endemic malpractice. Agents generally charge the vendor or tenant the highest fees and can often be the cause of problems buyers and tenants face. Many agents have great working principles, but a proportion of the market still operate with a Stetson on their head and a six shooter on the hip. Some with large corporate backing hiding behind press releases, without responsibility.

Statutory regulation assumes that piling on administrative barriers creates market integrity. It doesn't. It drives out small, reputable independents, inflates costs for leaseholders and buyers, and hands the market to a few corporate giants hiding behind compliance certificates. A regulator is only as good as its enforcement and the bar for stripping a licence is rightly high: systemic fraud or gross misconduct. Slow responses and aggressive sales tactics won't meet it, so expect warnings, fines and remedial notices, the same bureaucratic loop as the Ombudsman schemes. A Level 3 or 4 qualification proves someone can pass an exam, not that they're honest. Fixed compliance costs are a regressive tax: a chain runs one central compliance desk, while a two-office independent absorbs the overheads directly. And regulators are self-funding so clients ultimately foot the bill.

Regulating property agents is long overdue and I welcome it. Right now anyone can open an estate agency tomorrow with no licence and no qualifications, then handle the biggest purchase most people will ever make. A licence that can be taken away changes that. The first test has to be conditional selling. Buyers are still being told their offer won't reach the seller unless they use the agent's in-house mortgage broker. That already breaches the Estate Agents Act rules, yet it carries on because a rule nobody polices is just a suggestion. The new regulator must make it a licence-losing offence from day one, with no warnings and no grace period. Will it help the 5 million leaseholders the government mentions? Only if it arrives, and soon. We have no start date and no detail, just a promise of more information "in due course". Leaseholders don't need another round of consultation. They need a regulator with teeth, a firm timetable, and agents who know their licence is on the line.

Two weeks ago Angela Rayner and Labour made much of Reform’s crypto donations asking what exactly their backers were “buying” for their money. In June Ms Rayner herself pocketed £20,000 for speaking for 2 hours at the Propertymark conference and yesterday 3 months later she announced her intention to impose mandatory licensing and qualifications on estate agents, the very thing that Propertymark sells.
Regulation of estate agents is something which has long been called for, particularly by those with a vested interest in winning the government contract. The reality of regulation of estate agents is that we are already subject to a multitude of laws, regulations and oversight, including AML, Consumer Protection laws including most recently the Renters Rights Act. We are overseen by 2 ombudsmen, HMRC, Trading Standards and the ICO.
The “cowboys” in our industry do not operate outside the law, they operate outside the laws enforcement.