More estate agents in ombudsman schemeHome packs have encouraged agents to join

18 March 2008

A for sale sign

We explain how to help your kids get on the property ladder

The number of estate agents who are members of redress schemes has soared on the back of the introduction of home information packs, a new report shows.

The Ombudsman for Estate Agents said there had been a 60% jump in the number of agents who belonged to its scheme during 2007.

Nearly 5,400 firms covering 12,344 branches now belong to the scheme, the equivalent of 85% of all estate agents.

Home information packs

The rise has been driven by the introduction of the government's controversial home information packs, as any agent who wants to carry out business relating to the packs must be the member of a redress scheme.

At the same time, under the Consumers, Estate Agents and Redress Act, which is expected to come into force later this year, all agents must give consumers access to a redress scheme.

But the group said the vast majority of estate agents who joined during 2007 did more than the legal minimum that was required and signed up to the full code of practice that covers all their activities.

Complaints

However the huge increase in membership numbers also contributes to a jump in the number of complaints the ombudsman received which were within his terms of reference, with these rising by 48% to 870 for residential property sales.

The ombudsman, Christopher Hamer said: 'Last year saw a 42% rise in initial enquires, partly driven, I'm sure, by the fact the people are becoming more aware of our existence as a result of the publicity surrounding legislative changes.

'This can only be good for all those involved in the residential property market, whether it's in sales or lettings.

'The majority of disputes I receive are the result of failings by agents' administration such as the organising viewings or in maintaining the security of keys to property being marketed rather than any suggestion of malicious intent.'

Commission

The ombudsman received 1,004 complaints relating to individual instances of maladministration within the cases that were formally reviewed, nearly double 2006's figure.

There were also 556 complaints relating to commission and fees and 369 relating to sales particulars.

Around 188 people also complained about agents making misleading statements about the financial situation of buyers, with agents claiming people were cash buyers, when they in fact either had to get a mortgage or even a sell a property in order to get the money they needed to proceed with a sale.

Redress

A total of 795 cases were resolved during the year, 63% more than in 2006, of which 492 cases were resolved in favour of the complainant with redress totalling £268,881 paid out.

People were mostly likely to receive a payment of between £100 and £499, but 20 people received more than £3,000 in redress.

The Ombudsman for Estate Agents is a free independent redress scheme for consumers who are unhappy about the conduct of an estate agent.

His decisions, which can require agents to pay up to £25,000 in compensation, are binding on member agents, but consumers can still pursue matters through the courts if they wish to.

© The Press Association, All Rights Reserved