'Cowboy' estate agent blitz

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Estate agents face a blitz on "cowboy" practices following the publication of a damning report on the industry.


Ministers will promise to clamp down on the widespread abuses that have brought estate agency a bad name after an investigation by the Office Of Fair Trading.

They may even be forced to hold official "licences" to trade that could be removed if they are found to be flouting the rules in future.

The report, out today after an 18 month enquiry, will send shockwaves through the £4.6 billion a year estate agency market.

The OFT used under-cover " mystery buyers" to test how they were dealt with by agents. It examined a range of dubious practices, many of which are already illegal but still rife. They include:

Flyboarding: putting "For Sale" signs up outside properties that are not for sale, as a form of cheap advertising. The OFT has already condemned this practice as " misleading and undesirable" and in February censured the huge Bairstow Eves chain when one of its branches was found to be guilty of it.

Board bashing: ripping down and destroying rivals' "For Sale" signs to reduce their presence in a particular area. The Foxtons chain was at the centre of allegations about this practice last summer, leading to a Scotland Yard criminal investigation. The company strenuously denies all the allegations.

Under-valuation: defrauding owners by saying the house is worth much less than it is and persuading the owner to sell it to a friend of the agent. A London estate agent was fined £3,400 and expelled from the National Association Of Estate Agents for this practice last year.

Over-valuation: saying a house is worth more than it is, just to get the business.

Bribery: taking money from buyers to ensure that they can get the house for less than its true value, or favouring buyers who can also be sold a mortgage by the agent.

Inventing buyers: pretending that other buyers are interested in the property to push up the price.

Ministers at the Department Of Trade And Industry have been waiting until the four month publication of the OFT report before moving but are now likely to act swiftly.

The Government has long been concerned that the industry's selfregulation was not working and may now draw up legislation to bring estate agents under far tighter control. "The Government warned estate agents three years ago that they were drinking in the last chance saloon," said one DTI source.

Complaints about estate agents have been soaring in recent years. In 2002 the number of complaintsto the Ombudsman for Estate Agents rose by 18 per cent to a record 6,462. In 1991 there were just 1,236 complaints to the Ombudsman.

Separately, trading standards officers were also contacted around 5,500 times last year by members of the public who felt they were badly treated.

Ministers have tried to persuade the industry to force its members to join the Ombudsman scheme, which provides compensation of up to £25,000 for clients who have suffered at the hands of agents.

However, fewer than 5,000 of Britain's 12,000 estate agency branches are currently members of the scheme with many of the biggest and most powerful chains refusing to have anything to do with it.

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