As a student of the 1980’s I spent a lot of time protesting on London’s streets. It didn’t matter if it was against apartheid, student loan cuts or the Milk Snatcher in chief, Margaret Thatcher, there were always chants that went with these rowdy gatherings.
Whether it was “Maggie, Maggie, Maggie, Out, Out, Out” or “No ifs, no buts, stop the education cuts”, the best were simple and easy to remember.
Those fond memories came back to me when recently reading the chants of “Regulate, Regulate, Regulate” from those demanding change to the house buying and selling process. Whether it’s reining in unruly agents, ending the huge fees charged by management companies, or even the latest fad of comparing different regulators with each other, this drumbeat is the background music to the property industry at the moment.
There’s a problem though.
I’m struggling to find where regulation successfully addresses issues rather than business owners sorting them out.
Great failures of our time
First things first – I know a little about regulators – as the business owner working with two of them for years, I have to ensure my company is compliant. However, that by itself does not mean I am delivering a good service and it certainly doesn’t stop things from going wrong in the first place.
Which is where the misunderstanding lies.
After all, this year 28 electricity suppliers went bust affecting over 4 million customers. In fairness to their regulator, Ofgem, they did make sure they were moved to different suppliers, but stable doors and horses spring to mind.
Remembering 2008 ( or just watch The Big Short instead ) those same doors were being slammed shut by the Financial Services Authority long after the financial scandal had ruined millions of people’s lives.
Finally, last year, it took the Solicitors Regulation Authority nearly two years to strike off a junior lawyer after she left a briefcase containing legal documents on a train.
And that’s the thing.
Regulators are not the golden bullet to stop problems happening but too often there to give judgement afterwards, so why will extending their reach solve problems?
Putting it another way, it’s like asking the police to shut down a rowdy club, but what they should have done is put a bouncer on the door in the first place.
You see the problem.
My new regulators
As its Christmas, which even in these uncertain times, are a magically positive time of year, I was wondering if we could suspend reality for a moment. What if regulators could actually stop bad things happening in the house buying and selling process, who would be in my top five? These were my thoughts.
OfOpud
This Yuletide-sounding regulator will put an end to one of the most painful aspects of the process – those who over-promise and under-deliver. Unusually, this free-wheeling new office will target both agents and lawyers, barring those agents who tell clients “your lawyer has reported so you’re ready to exchange” or those lawyers who “guarantee exchange in four weeks” from working in the industry.
OfPanel
Sometimes the abbreviations used by regulators make it difficult to recognise what they do, but this one’s easy. Its role is straightforward – to stop companies being setup whose only purpose is bribing agents and brokers to pass work to an undisclosed conveyancer in return for huge referral fees and tickets to the Premier League match of their choice. ( Please note. Cash equivalent refunds for tickets to games cancelled due to Covid are not available.)
OfSim
This regulator has the significant challenge of eliminating what some call the Pot Noodle of the conveyancing business – that last-minute desperate measure when there are no other decent food options available. We’re talking about the much resented, “oh it’s not a problem, we can sort this out on the day”, simultaneous exchange and completion. These last minute fiendishly stressful activities need to be banned once and for all. Of course, to achieve that, we’ve got to make sure everyone in the chain has got their act together earlier, which will require a truly superhuman effort from all those in this new office.
OfSalami
The main challenge facing this office, responsible for eliminating “salami slicing” of lawyers’ fees, will be recruitment. Successful candidates must possess advanced forensic skills to spot sneaky hidden fees and outstanding eyesight to be able to read the extremely small small-print used by so many law firms. They’ll need to know that completing within 7 days of exchange is not an “expedited completion” so charging £200 is cheeky at best, or that “acting for a lender” on a sale means getting a redemption statement and sending money at the end, so charging £300 is a bit of a stretch.
OfPaper
This regulator is last on the list and for good reason. They have an incredibly difficult challenge ahead of them which will take an extraordinary amount of tenacity and sheer grit. They will be responsible for ensuring that any law firm who repeatedly force their staff to print emails and send letters by post will no longer be able to trade. Given that a recent back-of-a-fag-packet study showed that 99.63% of property lawyers are still doing this, this regulator really does have their work cut out.
But the reality is
Further regulation of the property industry is not the solution that many think it is.
Reducing poor practices and improving delivery will not be addressed by more regulation, but by ensuring the public vote with their feet with their choice of supplier and agents have a huge role to play in this.
Let’s hope that 2022 brings a more commercial approach to change and let’s leave the chanting to the students on street demonstrations.
Peter Ambrose is founder of conveyancing specialist The Partnership.
The only “Consumer Protection” that has ever really existed has been “Consumer Choice”
if you reduce consumer choice then in reality consumers are less protected.
If you incentivise more Landlords and more Agents, (perhaps by giving Agents and Landlords a Tax incentive to be in business) then you give consumers more choice, causing tenants to choose the best properties, forcing lower quality properties to improve, or risk being empty.
Most regulations actually reduce consumer choice, making things worse for the end consumer.
Things might be as good as the “regulator” (in their wisdom) thinks is ok, but will not be as good as they could be. You don’t move from a greasy spoon cafe to a Starbucks by stricter regulations. Give consumers choice and watch how things quickly improve for consumers.
Trust the market, trust the process.
Don’t trust Agents and Landlords or industry bodies who call for more regulations. Agents and Landlords don’t really want any more competition, so yes, they will say we need to close down other agents to, urm.. protect the consumers. Give new agents more hoops to jump through to encourage some “would-be new agents” to choose a different industry. That way we can go back to no longer doing floorplans and charging higher fees, like before PB opened. Close them down now… for the sake of the children!
Floorplans and better photos were a response to PB, not because the tech suddenly got better.
Sorry for the rant. Agents calling for ROPA (to nobble competition) should hang heads in shame. Just be better than the other agents. Agents calling for Landlords to be regulated like agents, (members of redress scheme etc) just want to reduce consumer choice and try to force more customers to choose an agent or their properties. Shame on them.
It’s a conspiracy against the consumers. That’s why we all fund the lobbing organisation Shelter. More regulations please. Force other Agents and other Landlords out of the market for us, so we can raise fees and raise rents.
Thank you Shelter. great job! You’re not improving the industry, only customer choice can do that!
Luckily for me, PIE doesn’t seem to like an honest debate on their site anymore, so comments will be turned off soon, meaning you can’t reply, but have a great Christmas anyway everyone.
I’m glad this is anonymous, I wouldn’t want to lose my ARLA membership.
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Regulation could go some way to raise the quality of service within the industry, and prevent agents adopting bad practises, turning the profession into the Wild West. And then we can up our fees.
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People say; Regulation would stop some ‘less savoury’ operators who they personally feel shouldn’t be allowed to exist? (for some reason).
Unfortunately (for you) they aren’t breaking the existing law, (which is already very robust), but you don’t want to fight this competition eye to eye and toe to toe, on the off chance your customers might willingly choose them over you, (sorry, I mean be dupped into choosing them over you).
Because you might have to raise your game to give you a visible benefit over that ‘lesser’ firm.
You can save yourself all that hassle if you can just write new regulations in such a way, as to make that firm illegal on some basis. Maybe they work from home and you don’t. maybe they don’t have the same ratio of male to female staff that you do, maybe they didn’t go to the same university you did? Maybe their office is further away from the town centre than yours?
Let’s draw an arbitrary line to cut off your competition, so you don’t have to compete with them, and now the industry is (in your opinion) ‘improved” (and customers have less choice), you can raise your fees.
What is, or isn’t a “bad practice” should be left to the customer to decide. You should not be trying to make it illegal for your competition to trade.
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