I had planned to write a piece on the Renters’ Rights Bill, which I had expected – and was genuinely hoping – would pass into law before Parliament’s extended summer recess.
However, as former prime minister Harold Macmillan ruefully quipped: “Events, dear boy, events.” I could not stand by and ignore the storm that blew up following a hard-hitting Panorama that revealed that conditional selling, used to boost income from referral fees, is still rife in the property market. It picked on two well-known national brands as part of their exposé.
No doubt, a good few other businesses exhaled a collective sigh of relief that they were not named and shamed, but undoubtedly have their crisis PR teams on standby in case further revelations come out in the big media as a result.
Many other agents will be at pains to demonstrate that they should not be tarred by the same brush. However, respected EYE contributor, Chris Watkins, has come out and pilloried those who have jumped on the bandwagon and who, in a few days or weeks’ time, will likely slip back into their old habits of portal juggling, property puffery and price overvaluation, as the overheated competition shows no signs of cooling.
This is without even mentioning the ongoing struggles the industry faces with material information. It will be back to business as usual, and we will soon see who falls off the waggon.
EYE also expressed its surprise that no one from the sector was available to make a comment. While many are likely still considering their positions (and again briefing their PR crisis teams), I felt compelled to speak up from the get-go.
Don’t get me wrong, the case against the two named agents is not yet proven. Clever though the undercover infiltration by the journalist and the witness interviews were, a lot gets left on the cutting room floor. National Trading Standards rightly pointed out that these allegations require thorough investigation. Still, mud sticks, and we would be fooling ourselves to pretend that this is not a problem.
That is why I spoke up. This is not a bandwagon I just jumped on. It is one I have been trying to steer for some time, albeit not as successfully as I would have hoped.
Cast your mind back to 2017, when the government undertook a call for evidence on the buying and selling market. One of the concerns that came out of this was referral fees.
Alongside RICS, Propertymark, TPO and Guild of Property Professionals, I joined a working group convened by NTSEAT to look at whether these kickbacks should be banned.
The result of our deliberations was a set of guidance requiring agents to disclose referral fees up front. There was even a pro forma template for agents to use.
TPO and de facto Propertymark, also updated their code of practice accordingly, and National Trading Standards warned that agents were in the last chance saloon. Failure to comply could lead to hefty fines and a possible future prohibition on the fees could be on the cards.
Roll on a year, and a follow-up report was published that showed there had been a positive effect. It was understood that this secondary market was seen as important to the sector and often benefited the consumer. However, its recommendation was transparency and disclosure should be incorporated into legislation. It also wanted to see a concerted publicity and awareness drive amongst the public, enhanced guidance and greater enforcement.
A lot of water passed under the bridge and fast forward to 2022. The housing minister at the time revealed there were no plans for putting mandatory declaration of charges and commissions in to law, asserting that existing provisions were sufficient. This is the link to the minister’s answer in 2022: https://questions-statements.parliament.uk/written-questions/detail/2022-05-16/2328/
We all got back to other important things and to be fair, at Property Redress, we were not receiving many complaints on the matter, nor were there many enforcement cases or prosecutions. It is now clear that the practice was still going on and as the market changed, agents got cute in how they hid what they were doing. Consumers remained in the dark so of course, they did not complain or refer the perpetrators to the authorities.
We must now admit, that having codes and guidance is evidently not working. Voluntary memberships, even with reputable bodies like Propertymark, are not a barrier against bad practices. While the redress scheme, ombudsman and enforcement agencies are picking up the pieces, it is not enough. What is need is regulation and stronger legislation.
The government needs to listen to groups such as HomeOwners Alliance led by Paula Higgins, heed campaigns like that of FT Adviser calling for tighter laws, and act now by speeding up the introduction of ROPA, the Regulation of Property Agents.
They should also look at the reforms proposed by Home Buying & Selling Council led by Bethany De Montjoie Rudolf and Kate Faulkner, to improve the overall experience of the buying and selling process.
It has been a long journey to get to this stage, and this latest reputational blow to the sector will not necessarily disappear. Indeed, I call on my colleagues in the industry, if you have not done so already, to break your silence. Let us push for the reforms and changes many of us have been championing for years, the ones we need, and the ones the best of us crave and will embrace willingly.
Sean, a lot of what you say is correct, but any more compliance, codes of practice or regulation will further stifle the industry.
And registration, regulation and compliance really doesn’t keep the bad guys away, as is evidenced in banking, pensions, insurance oh and Government. And in our industry there are very very heavy fines for failure to comply with AML, yet most agents fail miserably to do so.
What we have currently is more than enough. Its major flaw is that TSO simply cannot cope with its policing. So more would simply add to that burden and not help the cause I fear
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
You were genuinely hoping the RRB would pass into law before Parliament’s extended summer recess? I am glad I am not one of your client landlords.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Sean Hooker’s take on the Renters (Reform) Bill is deeply misguided. This legislation is fundamentally flawed and risks doing real harm to the very people it claims to protect—landlords, tenants, and agents alike. It’s not fit for purpose, and anyone genuinely representing landlords should be pushing back hard, not cheerleading it.
It’s baffling that someone in his position seems so out of touch with the realities of the industry. His clients must feel completely unsupported—this isn’t someone fighting their corner. Instead of calling for more regulation, he should be addressing the real issues: low pay, long hours, and the relentless pressure faced by agents, much of it driven by corporate giants like Romans, Connells, and Hamptons.
The sector doesn’t need more barriers to entry—it needs to be open to anyone willing to work hard and serve clients well. More red tape won’t raise standards; it’ll just drive more good people out of the profession.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I’m going to take a simplistic approach and suggest an all out ban on ANY referall fees for all estate agents. I’m old enough to have worked in the industry when these things didn’t exist – estate agents big and small only had to concentrate on selling houses. Agents would have to up their game to be competitive and offer a better service than their competitor which would mean increasing fees. House sellers would then be assured of getting the best buyer for their home. Negs and branch managers would be able to focus on what they really like doing best – show me a neg who prefers mortgage referalls to selling houses and I’ll show you someone who’s in the wrong job.
And who knows, Connells PR dept might be relieved to be freed from the constant accusations of bad practice….?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I too recall the pre referral fee days, where solicitors and mortgage brokers were referred cos they did a good job, not who gave the biggest kick back. I also recall conveyancing solicitors having 30/40 cases rather than a title lawyer having several case handlers with 100+ cases each feeding into a bottle neck at the top and the solicitor having the time to be on top of everything across their case load and everything happened much more quickly than it does now. Yes there were lunches out to say thank you and a hamper at xmas but not the endless corporate pursuit of wringing out every last possible penny. Many years ago I recall an agent ( one of the Connells brands ) telling me they only liked first time buyers, foreigners and old people as they were clueless and were much more lucrative in fees from side hustles that the rest of the buyers out there ……….. I got out 17 years ago , the writing was on the wall back then, agents were already guilty of conditional selling and nothing has changed ever since. To my mind banning all referral fees is the only way.
Yes estate agent fees would go up but overall the costs for a buyer should stay broadly the same as the other fees should reduce due to not having to disguise the cost of back handers! The only way is to make it illegal for there to be any payments between the parties or someone will find a way of disguising what is going on as “marketing” or some such nonsense and nothing will change. The whole industry needs a reset. No wonder the general public’s opinion of estate agents is lower than something you stepped in when this kind of behaviour not only goes unchallenged but is actively encouraged.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Let’s hope Panorama might also investigate Rogue Letting Agents too. Especially those who with hold rent paid to them by tenants, but then don’t pass onto landlords for months . And using Property mark logo on online adverts & on their website when not a member despite CCJs, PRS, Trading Standards , Statutory Demand involved & landlords still out of pocket. Perhaps just change their trading name as before to get around the PRS/TPO regulators. Broken Britain at its best
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
How very strange ?? If you expand that picture you will see that the Hunters ‘for sale’ sign appears to be floating in thin air. Whereas the ‘sold’ sign from Foxtons is posted into the ground.
Something fishy going on here me thinks !!!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Someone rattled my cage so I’m back; like the brief sequel on BBC3 that no-one asked for; years after the main show was axed.
There’s a lot to unpick about the program ‘exposé’, including how did the undercover agent pass basic employment scrutiny background checks, that mischievous editing can make a saint appear bad and that, as a piece of undercover journalism trying to show evenhandedness and a complete picture, it failed miserably. That said….
If complaints have dropped, what is the reason?
Perhaps, as this program showed (and many people in the past have often stated), if people don’t ‘know’ they’re being ripped-off, undersold, screwed-over because it is oh-so-easy to do and hide from buyers/ sellers; how can they know to complain? If you were one of the millions of people who bought a car based on its green exhaust credentials; did you even begin to think to complain that you’d been duped until the story broke that the manufacturers had fiddled the figures or, were you happily unaware you’d been ripped off until that particular story broke?
Why no hard-hitting interviews with the regulators?
The expose showed appalling breaches of the law yet, why no interview with a regulator asking how they were allowing this to happen? Journalism rule 1, surely?! (Yes, and don’t call me Shirley). There is ample news history evidence for any half-decent journalist to draw on to show these activities have been going on for years (some very publicly called out in mainstream broadcast and broadsheet newspapers (if I remember correctly, ahem) so why did Panorama not check this and hold the regulators feet to the fire?
This article headline appears to call for and end to regulation?
Why? True, as has been amply proved by NTSELAT, regulation without enforcement is no regulation; but why and end to regulation? For years, many in the industry were calling for liscensing as they do in the US and many EU states. Licensing doesn’t guarantee good oractice but it creates a bar to entry for the band-wagon jumpers who see an easy buck and no-one effectively enforcing ‘mistakes’ or even deliberate malpractice/ criminal activity.
Ok. That’s me done.
Back to a happy new career away from what I still see as the un-regulated/ un-policed cess-pit and stress-inducing world of estate agency.
Chris Wood
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
It’s not just conditional selling that’s wrong with the industry. I have first hand experience of selling a property with one of the agents named and it was an appalling experience.
No feedback from viewings, no liaison between agent and seller, no follow up to prospective purchasers enquiries, no advice or recommendations to allay purchasers fears arising from searches, referring viewers with no intent to buy, in fact there was very little communication during the whole process.
The industry needs to adopt a external verification process to ensure these cowboys are brought to book.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register