Estate agents escape regulation 'but web should be unleashed'

ESTATE agents are to escape regulation but more needs to be done to ensure buyers and sellers get a good deal, the consumer watchdog has ruled.

In its study of home buying and selling, published yesterday, the Office of Fair Trading (OFT) rejected calls to introduce regulation for estate agents, claiming the existing legislation was sufficiently effective.

However, it proposed an overhaul of the traditional model of buying and selling homes in the UK.

It said online alternatives to estate agents, such as websites that introduce private sellers to each other, were hindered by the current regulations, allowing traditional estate agents to dominate the market and weakening competition on fees.

The watchdog also recommended more stringent rules governing the fees received by estate agents for referring buyers to providers of other services such as surveying and conveyancing. The OFT claimed this could result in estate agents favouring one buyer over another, to the disadvantage of sellers.

Its year-long investigation into buying and selling covered the whole of the UK, but took into consideration the differences in the Scottish market.

John Fingleton, chief executive of the OFT, said it was more important than ever to ensure people get a good deal when buying or selling a home.

"Encouraging new business models, online estate agents and private seller platforms could put useful competitive pressure on traditional models and lead to better value for buyers and sellers," he said.

"The government can help this process by updating legislation and making sure regulation only applies where it is essential to protect consumers."

But Peter Bolton King, chief executive of the National Association of Estate Agents, criticised the decision.

"Once again the OFT has categorically failed to see that better regulation of the home buying and selling market is required," he said.

"Buying a home is often the largest single transaction of a person's life and it is disappointing that the OFT has not thought it appropriate to acknowledge that a robust and appropriate level of consumer protection is needed."