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23/03/2004
Estate agents need to improve customer services, says OFT report
Estate agents must improve their approach to customer services and more vigorous price competition is needed in the estate agency market, according to an OFT report published today.
The study examined competition in the market, levels of customer satisfaction, and the effectiveness of relevant legislation in tackling misconduct and unfit agents. It found that although the market structure was not uncompetitive, price competition was limited. There was also a high degree of customer dissatisfaction – a quarter of recent sellers told the OFT they were dissatisfied with the service they received from their estate agent, citing poor value for money, delays in the sale and inadequate communication.
The OFT also identified some serious complaints such as failure by agents to pass on offers or declare a personal interest, and suggestions that buyers would be more successful if they used financial services offered by the agent.
The report has recommended changes to the Estate Agents Act to enable "more effective enforcement" of consumer protection legislation to drive out those unfit to practice and to combat bad conduct. In addition, the industry is urged to raise standards of customer service through better and more widespread self-regulation.
The OFT also recommended that: sellers shop around between estate agents and negotiate on fees; and estate agents provide – and sellers request – fees quoted both in percentage terms and as a money amount. This should also be a requirement under any code of practice adopted by the sector.
John Vickers, OFT Chairman, said: "There is widespread public dissatisfaction about the market for estate agency services. Necessary change includes sharper price competition, more effective regulation and higher industry standards."
The property boom in England and Wales has seen estate agents earn an estimated £2.5 billion from the sale of residential property in 2002. Around 1.45 million property transactions took place that year, with an estimated value of £185 billion. More than nine-out-of-10 people buying and selling a home in England and Wales use an estate agent.
The OFT will launch a consumer information campaign to raise awareness of the savings that can be made by comparing prices between estate agents and negotiating on fees.
(gmcg)
The study examined competition in the market, levels of customer satisfaction, and the effectiveness of relevant legislation in tackling misconduct and unfit agents. It found that although the market structure was not uncompetitive, price competition was limited. There was also a high degree of customer dissatisfaction – a quarter of recent sellers told the OFT they were dissatisfied with the service they received from their estate agent, citing poor value for money, delays in the sale and inadequate communication.
The OFT also identified some serious complaints such as failure by agents to pass on offers or declare a personal interest, and suggestions that buyers would be more successful if they used financial services offered by the agent.
The report has recommended changes to the Estate Agents Act to enable "more effective enforcement" of consumer protection legislation to drive out those unfit to practice and to combat bad conduct. In addition, the industry is urged to raise standards of customer service through better and more widespread self-regulation.
The OFT also recommended that: sellers shop around between estate agents and negotiate on fees; and estate agents provide – and sellers request – fees quoted both in percentage terms and as a money amount. This should also be a requirement under any code of practice adopted by the sector.
John Vickers, OFT Chairman, said: "There is widespread public dissatisfaction about the market for estate agency services. Necessary change includes sharper price competition, more effective regulation and higher industry standards."
The property boom in England and Wales has seen estate agents earn an estimated £2.5 billion from the sale of residential property in 2002. Around 1.45 million property transactions took place that year, with an estimated value of £185 billion. More than nine-out-of-10 people buying and selling a home in England and Wales use an estate agent.
The OFT will launch a consumer information campaign to raise awareness of the savings that can be made by comparing prices between estate agents and negotiating on fees.
(gmcg)
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