Who Regulates Estate Agents?
The property market in the UK has an estimated net worth of more than £9 trillion and is mainly driven by estate agents selling properties of all shapes and sizes. With so much responsibility, it’s only natural to assume that estate agents are regulated to ensure high-level standards and proper practice. But is that actually the case? This guide looks at who regulates estate agents in the UK property market.
Are estate agents regulated in the UK?
The short answer is…sort of. Estate agents are required to abide by the Estate Agents Act 1979 (EEA). And the Consumer Protection from Unfair Trading Regulations 2008. They must also belong to an approved redress scheme under the Consumers, Estate Agents and Redress Act 2007.
However, estate agents don’t need formal qualifications or a licence to work in the industry. That means anyone can set up an estate or letting agency without experience or training. Essentially, estate agents aren’t regulated the same way as many other professionals in industries. Where formal qualifications are needed to perform specific roles.
Who regulates estate agents in other countries?
While regulation isn’t particularly robust in the UK, other countries have taken a more stringent approach. France, for example, has the strictest rules in Europe. It’s regulated by the Loi Hoguet of 1970 and the Implementation Order of 1972. Which means estate agents must have a professional card to operate and earn a bachelor’s degree in real estate.
In Italy, real estate professionals must have a minimum of 80 hours course preparation or a diploma in accounting. It’s also currently reviewing further legislation to make entry requirements even tighter. However, these two countries seem to be an outlier on who regulates estate agents. Like the UK, Spain and Germany don’t currently require agents to have any experience. Before becoming an estate or letting agent.
How does the current UK estate agent regulation work?
As stated above there’s a basic level of regulation in the UK.
The EEA 1979 sets a minimum standard of behaviour across the profession. While the Unfair Trading Regulations protecting consumers from misleading trading practices, as well as aggressive sales. However, this is not exclusive to estate agents and includes all businesses trading with consumers.
The Consumers, Estate Agents and Redress Act 2007 also requires all UK estate agents engaging in residential work to belong to an approved redress scheme. That deals with complaints about the buying and selling of property.
The National Trading Standards Estate Agency Team (NTSEAT) acts as the regulator for estate agents. It has the remit to assess if an individual or business in any part of the UK is fit to carry out estate agency work within the terms of the Estate Agents Act 1979.
Better regulation with Propertymark
While estate agents don’t officially need any experience. The best ones belong to membership bodies like Propertymark and have relevant qualifications. Propertymark is the leading membership body for property agents. It has approximately 18,000 members who must adhere to its Conduct and Membership Rules.
Buyers, sellers, renters and landlords using a Propertymark member agent receive more protection than if they used unregulated agents. Members must abide by Propertymark’s high standards. And there is a complaint procedure for consumers who don’t believe specific standards have been met.
Using a Propertymark agent gives consumers more protection. It also increases the chances of using a qualified estate agent who adheres to set rules and standards.
What is RoPA?
The Regulation of Property Agents (RoPA) Working Group is committed to delivering a framework focused on estate agents in the UK and letting and managing agents in England. Propertymark played a key role in the RoPA Working Group, which wants Government regulation to ensure everyone operating in the industry is licensed and adheres to a strict code of practice.
In 2019, the Ministry of Housing, Communities and Local Government (MHCLG) published a report outlining RoPA’s recommendations for industry licensing and qualifications. The working group was tasked with advising the Government on a new regulatory framework to help raise professional standards in the industry.
RoPA recommends:
- All agencies operating a residential property business should be licensed, and licensing should include a fit and proper person test for company directors.
- All staff delivering ‘reserved activities’ employed within a residential agency business should be licensed and adhere to a Code of Practice.
- All staff delivering ‘reserved activities’ employed within a residential agency business should hold a qualification at Level 3 or above.
- All company directors and management agents should hold a qualification at Level 4 or above.
- A new regulator be appointed to oversee compliance with an overarching Code of Practice.
A housing industry regulated by the Government means agents would need to be licensed and have the relevant qualifications to sell and let property. Ultimately, it offers more protection for consumers and greater transparency over industry operations.
Creating a regulated body of estate agents
Currently, agents don’t need a licence or qualifications to operate in the sector, and Government-led regulations still need to be put in place. And they soon could be thanks to RoPA.
In the meantime, membership bodies like Propertymark continue to ensure excellent practice across the industry, with its, agents having the relevant qualifications and offering a five-star service.
Last Updated: September 22nd, 2024
