Consumers, Estate Agents and Redress Bill [HL]

My Lords, I shall confine what I have to say to Part 3; that is, the estate agents’ compulsory redress scheme. During the passage of the Housing Act 2004, which brought into being the legislation governing home information packs, we had considerable discussion on whether estate agents should be more strictly regulated. As he has already said, my noble friend Lord Caithness—I supported him from the Front Bench—introduced various amendments to ensure that anyone in practice as an estate agent was qualified, registered with an approved body, trained and professionally competent. Although we believed that it was important that anyone charged with producing home information packs was covered in that way, we also wanted to widen that to estate agents’ work in general. That was resisted by the Government, the Minister then being the noble Lord, Lord Rooker. He introduced his own amendments, which resulted in a provision for the Secretary of State to make an order to require an estate agent to be a member of an approved redress scheme, but only for the purposes of complaints about home information packs. The Bill implements those provisions, which we supported, but extends them to the generality of estate agents’ work. I make clear that I support the redress scheme. But, as the Minister acknowledged when he opened the debate, the buying and selling of property is one of the most stressful undertakings in which any of us are involved. It is also without doubt the most expensive and life-affecting decision. It can be carried out with confidence only if those who are professionally charged with the sale and purchase of residential properties have impeccable integrity, knowledge and professional competence. Unlike in most other countries, there are currently no restrictions on operating as an estate agent in the United Kingdom. As my noble friend Lord Caithness pointed out, the Minister, when he no longer occupies that Bench, could, if he wanted, become an estate agent tomorrow, because anyone can set up an estate agency business with no experience, no qualifications, no insurance and without belonging to a professional body—so without the necessity of having to abide by any rules or codes of conduct. The limited measures in the Bill today are, as the Minister said, based on the recommendations ofthe Office of Fair Trading report of 2004. Apart from the redress scheme, they also include a requirement for estate agents to keep records—one would have thought that that had been done a little while ago—to give access to officials from the Office of Fair Trading and the trading standards office and enable the Office of Fair Trading to consider the fitness of someone to practise. The latter two provisions would presumably arise as a result of a complaint and therefore, as with redress, would occur post hoc—after an event. They would not prevent something happening. While I have no particular objections to the provisions in this part, I simply do not believe that they go anything like far enough, and nor does the National Association of Estate Agents, which might be expected to be pulling back from this as far as it could. However, a professional body which represents more than 10,000 estate agents in this country would support it being compulsory for anyone practising as an estate agent to be a member of an industry regulatory body such as its own or the Royal Institution of Chartered Surveyors, which has already introduced a technical qualification for estate agents as a minimum entry requirement. If the professional bodies see the need for there to be a legislative requirement to ensure that there is compliance across the profession on high standards, I simply do not understand why the Government balk at that. The current negative licensing regime, under which anyone can set up as an estate agent, even if the Office of Fair Trading can ban them in extremis, is completely insufficient. Estate agents these days are more often than not handling properties worth hundreds of thousands, and in London many millions, of pounds. They charge tens of thousands of pounds in fees and handle similar sums for the Chancellor’s stamp duty. They give advice to buyers and purchasers alike. Most are capable, some are not. Most will, by sheer weight of competition, have to act with propriety and competence. Some will not. When they do not, the loss to the person who owns or is trying to buy property could be catastrophic. After the event, compensation is not enough on its own. We really should be looking at methods of prevention. Finally, the redress scheme relates only to residential properties. It does not include residential lettings. This is probably because these measures amend the Estate Agents Act 1979, which did not include residential lettings. The Bill will be an excellent opportunity to redress that problem, too. Although noble Lords would not think it, judging by the amount we deal with, opportunities for legislation come seldom, and it is unlikely that the concerns that I and other speakers have expressed today and which are not addressed in the Bill will be considered again for a very long time. I hope that we may be able to consider some of these issues during the passage of the Bill.