Estate Agents

HC Deb 21 June 1989 vol 155 cc332-4

20. Mr. Martlew

To ask the Chancellor of the Duchy of Lancaster what progress is being made in the regulation of estate agents.

Mr. Forth

After an extensive review of estate agency issues, I have concluded that the best way to achieve a significant improvement in the practices of estate agency is through a combination of self-regulation and statutory provision. I have asked the Director General of Fair Trading to discuss with the industry the introduction of a code of practice for estate agency. He has agreed to report early next year.

We will need to support this code by acting against a number of undesirable practices, including tie-in sales where the agent refuses to pass on bids unless the purchaser agrees to arrange finance or insurance through him. I intend to do this by introducing an order under section 3 of the Act which would define certain practices as "undesirable." I have also asked the director general to review the arguments for extending the Trade Descriptions Act 1968 to misdescriptions of property.

Copies of my report have been placed in the Library and the Vote Office.

Mr. Martlew

Does the Minister agree that the people of this country have been ripped off too often by estate agents and that it is time that there were statutory, not voluntary, regulations to curtail the cowboys among estate agents?

Mr. Forth

I assure the House that this was not a planted question. I hope that the hon. Gentleman will consider carefully the answer that I have given rather than make a pre-prepared response. I am sure that he will find in my proposals and in the report that I have placed in the Library and Vote Office that I am dealing firmly but fairly with estate agency problems.

Mr. Latham

Can my hon. Friend confirm that any legislation that he introduces will contain a provision that recognises that organisations such as the Royal Institution of Chartered Surveyors are governed by proper professional standards?

Mr. Forth

Yes, I am pleased to acknowledge the role that the RICS and many other bodies have played in bringing forward their own positive suggestions to make the property transfer market work as efficiently as possible. Let me make it clear to my hon. Friend that we are not contemplating new legislation. I am using the provisions of the Estate Agents Act 1979 in what I regard as appropriate ways.

Ms. Quin

Has the Minister found time to respond to some of the criticisms levelled at the voluntary, self-regulatory approach by some of his hon. Friends, including the hon. Member for Walthamstow (Mr. Summerson) who said that the rules of conduct should be enshrined in law and backed up by full powers of the law? Furthermore, will the Minister's proposals for regulating estate agents deal with the worst abuse at present—estate agents preferring purchasers who are also getting financial services from those estate agents?

Mr. Forth

I can confirm that that is precisely one of the matters that will be covered by my invocation of the statutory powers under section 3 of the Estate Agents Act. I am sure that when the hon. Lady and my hon. Friend the Member for Walthamstow (Mr. Summerson) study my proposals in detail, they will find that they are to their entire satisfaction.