Consumers, Estate Agents and Redress Bill [HL]

I rise to speak in support of my noble friend Baroness Wilcox, and in particular her Amendments Nos. 128, 134, 135 and 136. I declare an interest as chairman and chief executive of an insurance broking and independent financial advisers’ organisation. I have lectured and written on insurance and financial services subjects. I have also been involved with the arrangement of mortgages and have dealt with estate agents. With regard to my own business, both the financial services and the general insurance activities are authorised and regulated by the Financial Services Authority. That encompasses not only licensing, but procedures relating to redress and dispute resolution. I broadly welcome the Consumers, Estate Agents and Redress Bill. Buying or selling a property is likely to be the most significant transaction in most people’s lives, and can involve a great deal of stress and anxiety. In view of that, the consumer needs assurance that the market is transparent. Estate agents play a critical role in the housing market, with over 90 per cent of people buying and selling a house through them. I believe that most estate agents are honest, although sadly a few rogue agents give the rest a bad name. It is vital for the good of the industry that there is seen to be a code of practice behind any redress system approved by the Office of Fair Trading, which ensures universal high standards and encourages transparent and effective practice within the industry. It also needs to send a clear message to the small number of estate agents who do not live up to our highest expectations. Professionalism, the raising of standards and the need to protect consumers are matters vital to estate agency. It has been seen by some as a slightly shoddy profession on occasions, because of a lack of a single set of standards. I welcome the compulsion for all agents to belong to a redress scheme, but concur with my noble friend that there needs to be a clear set of standards that all schemes adhere to. There is a voluntary ombudsman scheme for estate agents, the Ombudsman for Estate Agents, but only about 66 per cent of estate agents are members. If an agent does not belong to the scheme, the only remedy currently available to a consumer is to seek compensation through the courts, which is, of course, expensive and time consuming. The single code of practice should help to give the profession a better image. Research by Which? in June 2006 showed that over eight in 10 people think the Government should set up an independent body to deal with complaints about estate agents, while in March 2004 an Office of Fair Trading report found that one-quarter of sellers were dissatisfied with the service provided by their estate agents. Some 21 per cent of sellers and 23 per cent of buyers said they had experienced a serious problem with their agent, such as failure to pass on offers, suggesting that a buyer would be more likely to be successful if they also used the financial services offered by the agent, and failure by the agent to declare a personal interest. Of those, 71 per cent of sellers and 55 per cent of buyers complained. In the majority of cases, nothing happened or the complaint was not resolved satisfactorily. Consumer dissatisfaction with estate agentsis increasing. In 2005 the OEA received 6,021 complaints—a 35 per cent increase on the number received in 2000. That represents about one complaint for every four estate agents. That, surely, would suggest that a single system of redress should cover all estate agents, should be seen to set high best practice standards and should be seen to have real teeth.