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RICS calls for better residential property regulation

Wednesday 21st March 2012

Regulatory reform for residential property needs to come out of ministers' "too difficult pile", according to RICS.

The current regulatory and redress regime for UK residential property is complex, inconsistent and fragmented. It is ineffective at preventing significant consumer detriment and confusing for businesses.

Successive governments have danced around regulatory reform with piecemeal initiatives which have been of some benefit to the consumer, but cumulatively, have only served to add to the confused situation. The range of sector licensing schemes, awareness groups, and ombudsmen present a complicated picture to consumers who want and deserve more effective and transparent regulation.

Many High Street estate and lettings agents operating in the sector are not subject to the same high professional and ethical standards as RICS members, it said.

RICS agents are part of an effective, rigorous, and tried and tested regulatory regime based on the clearest standards of service and proper technical knowledge. Most importantly RICS regulated agents take appropriate safeguards with clients' money, professional indemnity insurance and consumer redress.

RICS is now calling on the Government to introduce a single regulation proposition for residential property aimed at preventing consumer harm and increasing consumer understanding. The proposition must have distinct elements - standards, enforcement, and redress - and RICS, with its far-reaching experience of principles-based regulation, is calling on the Government to endorse its work in driving the development of industry-wide standards recognised and understood by property professionals and consumers alike.

David Dalby, RICS Director of Residential, said: "Enough is enough. The Government must no longer turn a blind eye to regulatory reform in the residential property sector. It must be removed from the 'too difficult pile' and dealt with immediately in order to create a level playing field within which all businesses can operate. As long as agents don't have to legally meet any minimum professional standards before they start trading, the consumer is at significant risk. This must not be allowed to continue."

Steven Gould, RICS Director of Regulation, said: "Self-regulation properly developed, implemented and effectively policed, provides the best and most effective means of ensuring consumer service and protection, without increasing the regulatory burden on business.

"An easy first step for the Government would be a simple amendment to the 1979 Estate Agents Act, redefining the definition of estate agents to include letting agents. This needs to be followed up by action by trading standards officers to prosecute those agents not complying with the law. Property sales and lettings are too important to be left to those unwilling to demonstrate high professional and ethical standards."

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Mike Jones

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