Estate agents may have to go back to school

Labour plans to rid the industry of cowboys by requiring all staff to have at least one A-level

ESTATE AGENTS would have to go back to school and finish higher education under Labour plans to rid the housing market of cowboys.

Matthew Pennycook, the shadow housing minister, has tabled an amendment to incoming housing reforms that would require all estate agents to have at least one A-level and all directors of estate agencies to have an undergraduate degree.

If passed, the rules would need to be enacted within 24 months of the Bill becoming law. Some 102 pages of amendments to the 133-page Leasehold and Freehold Reform Bill are being debated by MPs.

Propertymark, the estate agency trade body, has long called for “a properly regulated industry” that can be “trusted and respected” by consumers.

Similar rules are already in place in Scotland. Other countries have even stricter requirements. In Sweden, all estate agents must have a two-year university qualification. But successive UK governments have resisted calls to regulate England’s agents in the same way. In 2017, Sajid Javid, then the housing secretary, committed to regulating lettings agents, resulting in a review led by Lord Best in 2019.

Mr Pennycook, the MP for Greenwich and Woolwich, is trying to set in motion the recommendations of that review through the leasehold Bill. He first mentioned Labour’s plans to introduce the proposals at his party’s annual conference last year.

Timothy Douglas, the head of policy at Propertymark, said the rules would apply retroactively, meaning agents could be forced to return to education if they do not have the minimum qualifications. They would probably be given a grace period in which to comply with the new requirements.

Mr Douglas said that, in England, rule changes would echo reforms that led to financial advisers having to become

‘We want a properly regulated industry where our knowledge and skills are trusted and respected’

more qualified back in 2012 under the Financial Conduct Authority’s Retail Distribution Review.

He added: “We want a properly regulated industry where our professional knowledge and skills are trusted and respected. We want to level the playing field for the consumer. There really is no oversight by anybody and that’s the fundamental issue. It’s just wrong.”

Lord Best’s review also called for a new regulator to oversee the sales and lettings industries. Currently, estate agents must be signed up to a redress scheme that mediates complaints between tenants and landlords. If they do not register, they face a fine of up to £5,000. Some experts believe this is too small to incentivise take-up, leading to rogue landlords sidestepping the rule.

Reward limits in the schemes are also relatively low. The Property Redress Scheme, for example, does pay out more than £25,000 and it rarely hits that ceiling. A regulator would be armed with a new statutory code of practice that would be used to adjudicate against agents and could lead to much larger fines.

In the meantime, National Trading Standards has tightened its guidance for estate agents. Late last year, it told firms that more details needed to be included in property listings and disclosed upfront at viewings in order to avoid buyers discovering “nasty surprises” that can collapse deal chains.

James Munro, of National Trading Standards, said his team would be monitoring property websites over the next year to see if the guidance is followed.