ESTATE AGENTS (REGULATION) (Hansard, 7 July 1976)

§ Mr. Ken Weetch (Ipswich)

I beg to move, That leave be given to bring in a Bill to provide for the registration of estate agents; and for related purposes. The aim of the Bill is to establish a framework of measures for the control of estate agents. Such a reform has been in the air for at least half a century. A number of attempts have been made in the House to achieve this object.

It is a surprise to me, as it is to many members of the public and to the estate agency service, that a cleaning-up operation has had to wait for so long. My researches, and information I have received from every quarter, not least from the estate agency service, indicate that there is substantial agreement that there are abuses and undesirable practices which should be eliminated. Secondly, for the long-term good both of the public and of the estate agency service the time has come for some form of statutory regulation.

The crux of my case is that the purchase or sale of a house is for most people the largest single transaction of their lives. For them substantial sums are involved and they want to be assured that they will be treated fairly and honestly—and, above all, that their deposit money will be safe while in the hands of estate agents.

I wish to make clear from the start that the substantial majority of estate agents deal fairly and properly with their clients and are scrupulous in their endeavours. We are talking about an 1372 unscrupulous minority who come and go like thieves in the night, and who not only swindle the public but give all estate agents a bad name.

There are serious grounds for complaint, and I know for a fact that in many urban areas of Britain, especially in London, there are unscrupulous people who are nothing less than sharks, who set themselves up as estate agents and who are predators upon an unsuspecting public.

Some of the main lines of complaint are clear. The most serious is the loss of deposits through misappropriation by unscrupulous people who set themselves up as estate agents. Some of these ne'er-do-wells take dozens of deposits on the same house and use the money for their own purposes.

Some estate agents are involved in disreputable broking activities, and some solicit drelatives of recently deceased people in the most odious way.

Many hon. Members will know from their constituency case work that what I am saying is perfectly correct. Therefore, in putting forward these basic principles I am sure that I shall be given support from all quarters of the House.

Many people will agree that some degree of regulation is long overdue. I am sure that most people will agree with me in principle that the differences are likely to arise in trying to construct a framework of control. May I therefore, in the short space of time that is available to me, lay down some general principles which appear to me to be appropriate.

In the first place, I think that it would not be desirable or credible to create an enormous bureaucracy of control to eradicate the abuses of a minority. Secondly, it is desirable to give every encouragement to existing organisations of estate agents to strengthen and build on what exists. It is far better to have self-policing by agents themselves for the most part, but let me strongly stress that I believe that this should be within a strict framework of Government influence and control in the public interest.

Let me emphasise that I am not aiming to create a restrictive situation. Although estate agents should be encouraged to commit themselves in some way to existing codes of conduct, those 1373 who still wish to remain outside can do so provided that they agree to be directly regulated by statute, possibly under the auspices of the Office of Fair Trading.

One very important principle I want to establish is that every aspect of qualification and conduct would not be regulated in great detail because one of the things that must be protected is the facility for entry into estate agency so that it can be kept competitive and so that it is receptive to new ideas.

Much of the detail and mode of operation to achieve these ends must be left open at this stage because I can think of alternative ways in which the objects can be achieved. It could be made mandatory, for example, for estate agents to keep deposit money in clients' accounts which could not be touched in the event of bankruptcy. Again, it could be made compulsory for estate agents to contribute to an indemnity fund, for which there are parallels in other legislation.

On all these matters, there is room for debate and there are obvious areas for careful discussion, but on major issues of principle there can be no compromise. It is now high time that there was some official regulation from the Government. It is now long overdue that there must be registration, licensing and codes of conduct without which estate agents should not be allowed to practise.

Lastly, while we in this House can never legislate against the proposition that a fool and his money are soon parted, we can give a framework of protection so that estate agents can be used by the public safe in the knowledge that we are concerned about their protection.