ESTATE AGENTS (Hansard, 7 July 1965)

§ Mr. R. E. Winterbottom (Sheffield, Brightside)
I beg to move, That leave be given to introduce a Bill to make provision with respect to persons and local authorities who negotiate for or otherwise act in relation to the acquisition or disposal by others of estates, interests, or rights in or over land; and for purposes connected therewith. The purpose of the Bill I seek leave to introduce is described on the Order Paper. I hope that hon. Members can hear me. A considerable exodus is taking place.

§ Mr. Speaker
Order. Hon. Members should remember that they may need a parallel indulgence themselves one day.

§ Mr. Winterbottom
The reason for the Bill can be found in the columns of the Sheffield Telegraph over the past few months. The paper has been running a campaign against the get-rich-quick merchants who have been masquerading as estate agents. In Sheffield, during the past six months, people have lost thousands of pounds in lost deposits to these bogus operators.
The Sheffield Telegraph, true, I believe, to the best traditions of the British Press, without fear and without favour, has exposed these tricksters, and I want, first, to pay my tribute to the paper and to say that the cases it has mentioned have promoted the whole of my arguments this afternoon.
According to the letters I have received, since it became known that I would seek leave to introduce the Bill, I gather that the Sheffield experience is repeated in almost every other part of the country. Some of these merchants, these tricksters, gain thousands of pounds from people who pay them deposits on houses which they can never get. If any hon. Members doubt whether or not the time has come when such a Bill should be introduced into this House all they have to do is to read the accounts of the actual cases in the Sheffield paper when I feel that they would be convinced, with me, of the justice of such a Measure as I have the honour to ask leave to introduce this afternoon.
There are several ideas in the proposed Bill on which I wish to comment. First, I want to express my gratitude to the 1590 hon. Member for the Isle of Ely (Sir H. Legge-Bourke) who, in 1962, introduced a Bill for the registration of estate agents. I want to thank him for permission to use almost the whole of the contents of that Bill. But with respect to him I want to say that that Bill did not go far enough, because it really ensured professional monopoly and business security for those who are in the professional organisations of estate agents.
The hon. Gentleman's Bill has been extended so that estate agents of experience who are conducting their business with honour and with credit over the years but who are not part and parcel of any professional organisation could be brought within the fold of registration and have provision made for them in the national council which it is proposed to set up.
I have made provision—and this is controversial—for the right of municipalities and local authorities to act as estate agents and to carry out all those functions in competition with the existing agents who will be registered. Moreover, municipalities will have some control over those estate agents and in the central offices of those authorities there will be lists of all the properties which are for sale, for the guidance, knowledge and help of any people who seek their assistance.
The Bill would provide for a national council and for that council to set up a finance committee, a disciplinary committee, and a committee to regulate an indemnity fund—long overdue in this country. The indemnity fund would be contributed to by the estate agents who would be registered under the terms of the Bill. That fund is one of the principal provisions in the proposed Bill, because even if we have registration and the recognition of estate agents by means of legislation we still have no guarantee of their honesty. So there has to be a fund to cover even the registered estate agent who may default on his obligations to the general public.
All I have said will readily be agreed to by estate agents, with perhaps the single exception of the proposed provision for local authorities to act as estate agents.
There is another controversial proposal in the Bill, and that is to institute a legal maximum commission above 1591 which estate agents would not be allowed to charge. That amount of commission is put at 2½ per cent., to include all expenses, including advertising. Moreover, there is a provision that an estate agent would be able to charge either the vendor or the purchaser only and not both. It is common practice to charge both the vendor and the purchaser for the same services in dealing with one unit of property. I believe that the time has come, even among solicitors, when that practice should be discontinued by law.
I have a letter here from a well-known, very honourable, very distinguished estate agent, who has built up a first-class business over the years. He charges 2 per cent., including all his expenses, for any transaction involving a sum less than £1,000, and there are reductions of that 2 per cent. for a transaction over £1,000 and he charges 1½ per cent. with corresponding reductions to old-age pensioners and widows. That man, who has built up an honourable business, is, I feel, the type of man who ought to succeed in that type of business.
I have great pleasure in asking the leave of the House to introduce the Bill. The gravity of the situation throughout the country has provided the earnest of my intentions. This is a nettle which is stinging the general public. It is a nettle which should be grasped, and it can only be grasped by legislation by Parliament.

§ Mr. Paul Hawkins (Norfolk, South-West)
I should, as a chartered surveyor and a chartered auctioneer, declare an interest in the Bill. I wholly agree with the majority of the provisions which the hon. Gentleman the Member for Sheffield, Brightside (Mr. Winterbottom) has outlined, in so far as they are the same as those which were in the Bill of my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke). I was very sorry to see that that Bill was not passed last Session.
As I say, I agree with the majority of the provisions, but till one sees the proposals in the Bill it is very difficult to tell whether one can agree or not with some of the others. For instance, the provision for municipalities acting as estate agents, 1592 once all the estate agents are registered, seems to be an unnecessary burden on the rates. In view of the very great shortage of trained and skilled valuers, and people who can truly assess the value and the structural conditions of houses, I think that this staffing of municipality offices would be extremely difficult.
As to the commission, I would say that in the suburbs of many big towns this is a most cut-throat business and I would think that many charges are less than 2 per cent. I act in country districts where we sell not many houses, but I have never heard there of charging both the vendor and the purchaser commission. That is a very bad practice, and it is one which I certainly have never heard of in my district.
I would only say that if the Bill—if it is introduced—is modified the hon. Member will gain the support of the vast majority of the professional organisations and the vast majority—

§ Mr. Speaker
Order. At that point, then, I must ask the hon. Member if he is opposing the Motion.

§ Mr. Hawkins
I am opposed to the Bill, Sir, because of the proposed setting up of municipal authorities as estate agents.
If one is selling houses on the outskirts of a big town where one may be dealing with 100 houses built at about the same time and to the same specification, it is hardly necessary to inspect them all, but when one is working in the country, and dealing with old rectories, old halls, and cottages, one has to examine them very carefully indeed.
I repeat that I am opposed to the Bill because of the proposal to set up estate agent offices in council offices.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business), and agreed to.
Bill ordered to be brought in by Mr. Winterbottom, Mr. George Craddock, Mr. David Griffiths, Mr. Gregory, Mr. Lipton, Mr. Frank Allaun, Mr. William Hamilton, Mr. Owen, Mr. Varley, Mr. Harold Walker, and Mr. Thorpe.