Following on from the Red Tape Challenge, the Government’s response to the consultation on amending the Estate Agents Act to encourage new business models confirms plans to exempt intermediary agents which help homeowners privately advertise and sell their houses from the Estate Agents Act 1979 (EAA).
Government will also repeal the Property Misdescriptions Act 1991 (PMA) which currently requires these businesses to check the accuracy of advertised property details. The PMA has largely been superseded by the Consumer Protection from Unfair Trading Regulations and the Business Protection from Misleading Advertising Regulations, which can be applied more flexibly and have a wider range of enforcement measures and protections.
The measures will ensure that these businesses do not face disproportionate costs as a result of regulations intended for traditional estate agents.
Jo Swinson said: “A flourishing housing market is hugely important to the economy, and one of the ways to boost it is to cut through bureaucracy and allow people to buy and sell more easily. This is why we are proposing to change the rules so that businesses that facilitate private property sales aren’t caught out by the regulations for estate agents.
“These intermediaries help buyers and sellers contact each other at a low cost, but don’t engage in other estate agent activities, so it’s unfair to expect them to go out and check all the property details of all the sellers on their websites. Reducing the regulations for these businesses will open up the market and increase choices for consumers looking to save costs when buying or selling a property.
“Selling privately can be a useful and cost efficient method, but consumers should always make sure they are well informed about the different levels of protection offered by these businesses compared to traditional estate agents.”
Whilst most people prefer to use estate agents to sell their house, some opt to do the work themselves and sell privately in order to save on estate agent fees. In recent years, web-based intermediaries and portals have started hosting private property sales advertisements, but stop short of getting involved in the sales process. These types of intermediaries have low costs, and do not engage in estate agents activities, such as providing advice. Currently however, they may still be defined as estate agents under the EAA.
These changes arise from the Disruptive Business Models theme of the Government’s Red Tape Challenge. Government will bring forward an amendment as soon as the parliamentary timetable allows.