The Carsberg Review

by Phil Bowden

The Carsberg Review lists a number of recommendations for improving the house buying and selling process, but it’s up to the industry to now develop these wisely.

The Carsberg Review provides the industry with a vehicle and a rare opportunity to discuss and ultimately shape the future of the house buying and selling process over the next few years.

Sir Bryan Carsberg was commissioned by the Royal Institution of Chartered Surveyors, the National Association of Estate Agents and the Association of Residential Letting Agents to determine whether regulation is needed in the agency market.

Sir Bryan concluded that the property market is not working well and that consumers were not properly informed about the qualifications of the agents they use, or what standards they should expect from them.

Sir Bryan felt that regulation would play a constructive part in tackling this issue and offer consumers an improved service in terms of quality and price.

The first question to ask is why it is that this report is commissioned by industry bodies and not Government.

Is it that Government has lost interest in shaping the future of our industry? Home Information Packs were supposed to be the vehicle to cure the ills of the business, only to become an inconvenience that the industry has little faith in. Generally, sellers don’t want to pay for the packs and buyers lack an appetite for them. So, is now the time for Housing Minister Caroline Flint to recognise that change is needed, and that the Carsberg report is a reasonable platform from which to start this process?

Regulation

Is regulation the way forward? I hear a collective groan from many readers, but if you take Sir Bryan’s view, what we have in place now is a complex set of regulations, which exist but which few in the industry and even fewer consumers really understand. Sir Bryan mentions in his report that current regulation is based on negative licensing rather than active regulation – in other words, anyone can set up as an estate agent and only if they are then found to be ‘unfit’ can their license be withdrawn.

Active regulation would result in the membership of an industry body by every agent wishing to continue operating. So, is the way forward best served by having industry entry standards in the interest of consumers? Moreover, does the current regulatory and compliance framework need reform?

Sir Bryan concluded that our regulation is complex and fragmented. He recommends a simplified process whereby a regulator and an ombudsman operate independently, with the role of the former being to introduce, monitor and develop standards of behaviour that agents through their membership bodies would need to adopt. The ombudsman would handle any complaints. Would this simplified structure work better for the consumer and be less complex for the industry?

Moreover, why is it that the behaviour of a minority can be allowed to dictate how consumers see the entire industry? Poor standards of behaviour exist in the housing industry, as they do in any sector, so it’s debatable whether the inefficiencies highlighted by Sir Bryan are simply a result of complex and fragmented regulation.

Implementation

Who is going to police agents’ adherence to a new regulatory regime? Is the Office of Fair Trading (OFT) sufficiently resourced to do the job? If, as Sir Bryan recommends, the OFT’s powers are transferred to a new regulatory body, who will have responsibility for policing them?

Equally unclear is how consumers would recognise a qualified estate agent if a minimum entry qualification were introduced, as Sir Bryan also recommends. How do consumers choose an agent? Would minimum standards change the way consumers view their estate agents?

Sir Bryan provides evidence of low levels of complaints when considered against the transaction volumes involved, but highlights the fact that many consumers feel frustrated with the buying and selling experience they had throughout the process.

The process of buying and selling property is complex and most consumers are baff led by it. Sir Bryan views the communication process between agents and buyers and sellers as inadequate. Does this lack of service stem from a lack of an entry standard qualification? Is now the time to consider one? There are schemes in existence that could be used to address this issue, with a good base being the National Vocational Qualifications framework.

Whatever the industry’s thoughts on Sir Bryan’s review, it should be used as a basis for discussion and stimulate a debate that will inf luence the way our industry develops over the next few years. Are we happy to let things stay the same? Is the way forward the status quo or do we want to change our industry for the better, for both agents and consumers? The Carsberg Review gives us the opportunity to inf luence decision makers about the future of our industry, so let us not waste this chance to be part of the agenda setting process.

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