Time to ‘shake up’ the buying and selling of houses?

It’s time for a “shake-up” in the system of buying and selling houses in the UK, according to report by the Office of Fair Trading (OFT).

It has just completed a study which found that the housing market is dominated by traditional estate agents with “weak competition between them on prices”.

The OFT report says that as “property prices rise during housing booms, so too do estate agents’ fees”. It calls for legislation to allow new entrants into the market with more competitive business models to provide better value for money for the consumer.

It also calls on the Government to consider additional regulation relating to the fees estate agents receive for referring consumers to providers of ancillary services such as mortgage advice and surveys.

Similar concerns were raised recently by the Law Society about the way some estate agents were inflating the cost of Home Information Packs (HIPs) by adding hidden charges or commission fees. 

This is because many agents hire outside providers to supply the HIP and then add on a commission fee for themselves when billing the client.

A Law Society spokesman said: “If the agent is paying £300 to the HIP provider and then charging their client £400 the client is paying an extra £100 unnecessarily.

“If sellers do find their agent is charging extra for their HIP they should ask their solicitor if they can provide a HIP instead, as solicitors are required to be fully open with their clients about fees. The added benefit of using a solicitor is that they are all strictly regulated and required to follow stringent rules, unlike estate agents.”

Please contact us if you would like more information about Home Information Packs or any aspect of buying and selling a home.

 

March 2010

The views expressed in this article are those of the article contributors, for which Judge & Priestley LLP accepts no responsibility. Readers should take appropriate legal advice before acting on any issues raised