Overview: A small step towards estate agent regulation

It looks good on paper: a tough new line from the Government on dealing with rogue estate agents through independent ombudsman schemes and even the threat of a lifetime ban.

It looks good on paper: a tough new line from the Government on dealing with rogue estate agents through independent ombudsman schemes and even the threat of a lifetime ban.

Few would argue that this is overdue - except possibly the Office of Trading, which balked at taking strong action earlier this year - and many would go further in wanting to see compulsory licensing rather than just compulsory membership of a complaints procedure.

The most vociferous of the critics is the RICS (Royal Institution of Chartered Surveryors) who regard the new proposals, which will form part of the Housing Bill, as welcome but feeble.

In their words it is "a cop-out and will not deter the cowboys". Louis Armstrong, the chief executive, regards it as tinkering around the edges and simply lulling the consumer into a false sense of security. "The real root of the problem is that anyone is able to set themselves up to practise as an estate agent," he says.

It does seem extraordinary that such an important sector to our sense of personal and national well-being should remain unregulated and you don't have to be a disgruntled consumer to hold that view.

Estate agents say they would love to make it harder for newcomers to join their ranks and easier to get rid of the bad apples.

But wishing is easy, and their actions don't always make it obvious that they care so desperately about the reputation of their industry.

Although currently we have just one Ombudsman scheme that is independent and can offer redress, only 42 per cent of estate agent choose to sign up to it.

What, we might fairly ask, about the remaining 58 per cent? While we might expect the fly-by-night and charlatans to avoid the possibility of any scrutiny it is less clear why reputable estate agents should be so reluctant to commit themselves. Even though they may have robust professional and in-house codes of conduct, their commitment to a national scheme would count for something among consumers.

It is for this reason that bodies such as the Consumer Association welcome the Government's proposal as a step in the right direction and why perhaps those like the RICS, who feel so disappointed, might find a statutory scheme has far wider implications.

An agent who is found wanting by the ombudsman could be expelled and if belonging to the scheme was a requirement by law, at a stroke they would be barred from practising.

These are the sort of questions that Stephen Carr-Smith, the Ombudsman for Estate Agents, will be discussing with the OFT this week but at the very least he reckons the ground will change significantly if the scheme were to be subject to judicial review.

So this could be a bigger step than it immediately suggests.

Certainly anything that takes a cowboy agent off the high street sooner rather than later, must be welcome.

Last year for instance the NAEA (National Assocation of Estate Agents) expelled two members for offences ranging from deliberate under-valuations to mortgage fraud and misusing client account funds.

Unfortunately for the general public as non-members they were free to carry on plying their trade, whereas under the new proposals we might have seen the back of them for at least a good number of years.

Crucial to the authority of any mandatory scheme, believes Carr-Smith, is that that there should be only one so that everyone is operating under a single code of practice. That would be progress in itself.

A complaints procedure, even one with teeth, may not satisfy those who want a system of licensing.

However, having everyone on board has to be an improvement.