I will start at the back and deal first with Amendment 82, in the name of the noble Lord, Lord Campbell-Savours. You might think that auctions are bad here but you should see them in Australia. I bought my flat at auction out there and what they do is start the auction and when they reach a certain point they stop and say, “We’ll have a break”. In the break, they get hold of the vendor and say, “Why don’t you come down on your reserve?”, and get hold of the purchaser and say, “Why don’t you go up on what you are going to buy?”. They might do that two or three times within the auction. Fortunately I had someone helping me, who made clear to the auctioneer that if they went on and broke more than once, we were out. We got the property and I have had it a very long time.
There are good and bad things about auction. I accept the point the noble Lord made about deceiving people about how cheaply they are going to get something,
but of course it is unpredictable and properties sometimes really do not sell, while in other cases they do. At least with an auction all the documentation about the property is provided in advance of the auction so people are not kept in the dark the way they are with lettings and by managers. People launch into a property they are going to rent, or buy leasehold, and they find that there are all sorts of hidden clauses that no one ever drew their attention to and that no real documentation is available. It is quite different; each system might have its faults but they are different faults and it is hard to know whether you will ever get them right.
However, I have a certain sympathy with the point the noble Lord, Lord Campbell-Savours, made. If you have gone a long way it is very difficult—you have gone to the trouble, you think the place is going to be within your range but it is not. It is really very hard to resolve that one. Do people wake up to the fact that it is just a selling technique, which happens all the time, or are people genuinely taken in by these deliberate ploys? It is complicated but he has got a very interesting point that requires further investigation.
I strongly support the amendment of the noble Baroness, Lady Hayter. Talking about letting agents, I was quite stunned to see on television people letting these sheds in some parts of London. They had no windows or anything in them; a family of 10 living there and sometimes no running water or electric light. It was just unbelievable. The people who were renting them produced leaflets from the agent who was offering them to let. When the BBC—I think it was the BBC although it could have been another broadcaster—went to say to these people, “How could you be letting this when it has no planning permission and does not conform with any health standards of any sort?”, the answer was, “Oh, no, we were never letting it”. Yet they had proof in front of them of the printed leaflet about it being available to let from that particular agent. That is the absolute bottom of the scale but between that and the really desirable letting agent, there are all sorts of gradients.
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All the conflicting interests in property, or most of them, seemed to be present at the round-table meeting at the department. Every one of them—including ARMA and ARLA, which represent managing and letting agents—wanted to see regulation of these businesses. They were not just pushing for a redress scheme; the redress scheme was the one common denominator that came out. Those represented included LEASE and Peverel. Everyone was present and every one of them favoured a redress scheme. Every one of them thought that the group you had to worry about—say, with ARMA or ARLA—was not the 50% who voluntarily paid their £150 membership but the others who did not join. The ones who did not join did so because they did not want to conform to certain standards, so it is very important to have that scheme.
The noble Lord, Lord Borrie, was a very distinguished president of the Trading Standards Institute. Fair trading is good, but people do not tend to associate it mentally with property. Everybody knows what a property ombudsman is. If we had—at the very least and only as a first step—a redress scheme that was not voluntary
but obligatory, we would have made huge progress, even though it might only be a first step. There is a need for legislation, and that legislation really needs to bring in regulation of both letting and managing. The noble Baroness, Lady Hayter, will correct me if I am wrong, but I think her amendment covers managing agents as well as letting agents. That is a very important point. As has already been said tonight, at the round-table meeting the British Property Federation wanted to make it perfectly clear—because it was misquoted so often—that it supports a regulatory system. This must be repeated again and again; we have heard so often that it opposes it, but that is not true at all.
People say we should not have any more regulations. We are all for less regulation, but not where it is necessary. Regulations should be brought in where they are required. This complete lack of transparency, this failure to disclose things, takes place all the time; for example, in the management of blocks people have no idea what they have to pay for and what they do not have to pay for, and no idea what the money is spent on. There have been cases in the past where it was found that someone who claimed insurance money was getting a 50% kickback from it, all due to a lack of transparency. Until we get some regulatory standards we are not really going to get that.
Going back to the original point, a redress scheme is the very minimum we could expect from the Government, and I hope they will be forthcoming in this. We must have a redress scheme. We have heard that the awards made are small. Every case that was dealt with at the redress point—the early point—would have saved huge amounts of money and huge amounts of work. People are even threatened with the loss of their own homes. That would all be avoided if these things were resolved early and simply. I strongly support the amendment of the noble Baroness, Lady Hayter, and I hope the Government will look on it favourably.