HC Deb 21 June 1989 vol 155 cc177-8W
67. Mr. Nicholas Brown

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

Mr. Forth

Over the past 11 months I have carried out an extensive review of estate agency issues. In the course of this review I have had meetings with the major bodies representing estate agents and other interested parties.

The main objective of the review was to identify ways in which the practices of estate agents could be significantly improved to provide a better service. I have concluded that the best way to achieve this 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 to improve consumer protection and enhance standards of service. The code will need to include some form of disputes procedure and a system for monitoring compliance with its provisions. This should create a strong incentive, not least on commercial grounds, for estate agents throughout the industry to comply in order to attract public confidence. The director general has agreed to report to me early next year.

I have also concluded that we need to act against a number of undesirable practices identified in the review of the working of the Estate Agents Act 1979 recently published by the Director General of Fair Trading. I intend to do this by introducing an order under Section 3 of the Act which would define certain practices as "undesirable". I expect these to include, for instance, tie-in sales where the agent refuses to pass on bids unless the purchaser agrees to arrange finance or insurance with hin, "bidding-up", misleading advertising and unfair or misleading contract terms. If an agent is found to be engaging in "undesirable" practices, the director general will have the power to prohibit that person from doing estate agency work. The exact wording of the order will follow from how the code of practice is set out, and I hope to lay an order soon after the director general makes his report next year.

I have also asked the director general to review the arguments for extending the Trade Description Act 1968 to misdescriptions of property.

In the course of my review discussions of the problems and potential solutions have gone wider than estate agency, and have touched on other aspects of the property transfer system. I look forward with interest to announcements by my noble and learned Friend the Lord Chancellor on the subject of competition in conveyancing, and by the Secretaries of State for Scotland and Northern Ireland on the conclusions to their reviews on the position there.

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