The Estate Agency Industry (Hansard, 9 July 1990)

§ The Minister of State, Department of Trade and Industry (Lord Trefgarne)
My Lords, following the recent review of this matter and the failure of the industry to agree a suitable code of practice the Government have decided to make a number of changes to the regulations, on which consultations are now taking place.

§ Lord St. John of Fawsley
My Lords, I thank my noble friend for that reply. While I welcome the proposals to penalise the worst abuses practised by a minority of estate agents, is not the only long-term solution to the problem to transform estate agency into a properly regulated profession, with qualifications for entry? While the Government are considering that possibility, will my noble friend also consider whether written offers to purchase property should not be made binding?

§ Lord Trefgarne
My Lords, the last point made by my noble friend is a matter for the contractual terms rather than the practice of estate agents' business generally. As to the first question posed by my noble friend, we believe that the way to proceed should have been by means of an agreed code of practice, if that could have been achieved. It is regrettable that the Director General of Fair Trading was not able to achieve that. However, I believe that the way forward now proposed, by means of a range of regulations 2 listing among other things undesirable practices, will curb most of the abuses which rightly concern my noble friend.

§ Lord Dean of Beswick
My Lords, does the Minister not agree that if the suggestion made by the noble Lord in his supplementary question, that written acceptance should be treated as a contract, was written into the law, that would stop some of the unfortunate gazumping which mainly affects young, first-time buyers? Does he agree that it might also act as a brake on the undesirable inflationary spiral in house prices which has occurred over the past two or three years?

§ Lord Trefgarne
My Lords, I do not necessarily disagree with the noble Lord any more than I disagreed with my noble friend. However, it is important to remember that responsibility for the practices to which the noble Lord refer red rests with individual parties involved in the transaction. Estate agents are sometimes drawn in to such practices through their common law obligation to pass on all offers to their clients, but I do not believe that the solution to the problem necessarily lies in regulating the profession in the way my noble friend suggested.

§ Lord Williams of Elvel
My Lords, does the noble Lord agree that the draft statutory instruments that his department has issued for consultation contain many sins of commission—things that are undesirable if they are done—but no sins of omission, in the sense that if estate agents refrain from giving information they are not culpable? Is there not a gap in the orders?

§ Lord Trefgarne
My Lords, I do not believe so. Naturally, one of the purposes of the consultation is to ensure that there are no obvious gaps such as the noble Lord has suggested. A number of requirements will be laid on estate agents in terms of what they must do as well as a range of things that they must riot do. I hope that if the noble Lord is able to find the time to study carefully the four different sets of regulations he will come to the same conclusion as we have.

§ Lord Williams of Elvel
My Lords, I am most grateful to the noble Lord, but I only obtained a copy 3 of the document through devious means because I was not, alas, on the list of those to be consulted. Does the noble Lord accept that if in future he would like to consult the Opposition on such orders he may receive serious comment from us?

§ Lord Trefgarne
My Lords, we are always anxious to hear the views of every noble Lord, including those sitting on the other side of the House. I can reassure the noble Lord that he has until 31st July to submit his views, and if he wishes to do so we shall be very happy to receive them.

§ Lord St. John of Fawsley
My Lords, is my noble friend aware that I obtained a copy of the regulations through the "devious means" of asking the Library?

§ Lord Trefgarne
My Lords, whether that was the same route by which the noble Lord, Lord Williams, received his copy, I cannot say.

The Earl of Selkirk
My Lords, is the noble Lord aware that in Scotland the system of buying heritable property has virtually put an end to gazumping? Has that method been carefully considered by the committee that is looking at the point at present?

§ Lord Trefgarne
My Lords, there is no legal impediment to the use of the Scottish system in England and Wales. However, the certainty that it offers to prospective vendors and purchasers is to some extent offset by other disadvantages.

§ Lord Cledwyn of Penrhos
My Lords, can the Minister say to what extent problems are created by the fact that individuals are able to practise as estate agents without having any qualifications whatsoever? Does he agree that there are two major qualifications; namely, membership of the Incorporated Society of Valuers and Auctioneers and of the Royal Institution of Chartered Surveyors? Would it be advisable to bring pressure to bear upon those two branches of the profession to unite in some way, and will he introduce legislation to ensure that only those with a proper qualification can practise?

§ Lord Trefgarne
My Lords, the Director General of Fair Trading went to considerable lengths to try to persuade the bodies concerned—or maybe one of them, if that could have been agreed—to produce a code of practice which might conceivably have included the kind of provision which the noble Lord indicated. It is a matter for regret that that did not prove possible. Naturally, any professional body involved in this or any other field is likely to suggest that every practitioner in the field ought to belong to its organisation. As I said, it is unfortunate that they were not able to agree the way forward. We believe that it is important to ensure that purchasers and vendors of property are protected from the kind of abuses that have been prevalent recently. That is why we consider it better to proceed in the way which we now propose and upon which we have invited the views of all those who are involved.