License to Sell

How can it be in this day and age of sweeping regulation that estate agents are not already licensed?

Casting a line to entice a solitary fish. Practicing as an Art Therapist. Owning a kebab shop.

These rather benign activities all have one thing in common - they require a license.

The officiation of marriages; driving a car; becoming a pilot ... all involve study, mandatory testing and, to different degrees, vigorous ongoing checks to ensure competency. It's a given that any job, pastime or such like that involves the well being of other people, requires oversight and regulation to ensure a decent standard of outcome and tenure.

Buying or selling a house involves lots of oversight. For instance, the lawyer that conveys the transaction will be a Licensed Conveyancer or a qualified solicitor. The broker that advises on the mortgage and life insurance protection will be regulated closely by the Financial Conduct Authority and the mortgage lender's valuer that surveys the property before a loan offer is made, will be a member of the Royal Institution of Chartered Surveyors.

But for decades, the pivotal entity in the home moving process and the most influential, does not require a licence to operate and is not compelled to undertake a knowledge test to ensure that they even remotely know what they are talking about. How on earth can that be right?

For years, the consumer has suffered at the hands of a trade that has seen complaints to the Property Ombudsman soar. These now stand at well over 3,500 each year, one for every five UK estate agency branches. In the annual 'Best and Worst Professions' list, estate agents trade places with traffic wardens, tabloid journalists and politicians. Whilst property folk languish in the bottom three of all job perceptions, bankers and tax inspectors notionally look down upon them from a state of relative moral superiority.

The estate agency profession (I wish it were legitimately able to be termed as such) has a problem. Many will agree that it has issues around honesty and integrity whereby they orchestrate situations that benefit themselves rather than their customers. Examples include:

• Not putting offers forward
• Selling a property to friends and those that financially 'incentivise' them personally rather than to a better buyer that is also in the running
• Absconding with tenants' deposits and landlords' rents
• Failing to describe properties accurately
• Not informing buyers of problems that are to the detriment of their purchase
• Lying about other buyer interest
• Insisting that a buyer (or seller) are compelled to use the agent's own conveyancing or mortgage and insurance services....

The list goes on.

But not every case of consumer disadvantage is due to lack of integrity. Often it's simply a case of ignorance. Ignorance of process or of the law. And this is why a compulsory knowledge test is so vital in raising standards amongst individuals and businesses themselves in the sector.

At long last, the Government has announced that they intend to impose that knowledge test upon the rank and file of our industry. It will be consulted upon initially and then we'll hear details as to whether the hurdle will be high enough to be meaningful... in other words will the test have teeth and will it be applied to all customer facing individuals within each company or just a cursory company wide test that a senior representative is responsible for. In my book, it needs to be the former.

Govt has stopped short at announcing licensing per se. Yet if it is to truly make us all accountable there must be a licence involved that can be suspended and potentially revoked in the instance of transgressions or where knowledge is proven to be lacking. The consumer deserves nothing less.

The announcements this week are a pre-cursor to further measures that should include reservation agreements to bind seller and buyer contractually earlier; the digitising and centralisation of property data (HM Land Registry, leasehold management information, upfront info on listing gathered by the agent) to allow lawyers and agents to facilitate faster transactions; and the alignment of search providers and mortgage lenders to necessitate that their involvement does not provide further timing obstacles.

Meantime, whilst the estate agent is not always the bad guy in the moving process (lawyers, brokers, local authorities, surveyors and sellers and buyers themselves can definitely take a bow too); I greatly welcome any measures that better regulate the estate agency industry, provide accountability and that insist upon an adequate familiarity with the moving process and with best practice.

Surely as much governance responsibility should lay with those that are encouraging the purchase and sale of our most expensive asset, as lays with those that supply skips to sit outside of them.