Crackdown will close rogue estate agents

Rip-off estate agents face being closed in a crackdown on rogue property-sellers to be announced by ministers this week. All agents will be given a statutory requirement to join the National Association of Estates Agents' (NAEA) code of conduct scheme. It will be policed by the industry's ombudsman, Stephen Carr-Smith under a change to the Housing Bill to be tabled in the Lords on Wednesday by the Government.

Rip-off estate agents face being closed in a crackdown on rogue property-sellers to be announced by ministers this week. All agents will be given a statutory requirement to join the National Association of Estates Agents' (NAEA) code of conduct scheme. It will be policed by the industry's ombudsman, Stephen Carr-Smith under a change to the Housing Bill to be tabled in the Lords on Wednesday by the Government.

Estate agents who persistently break the codes of practice will face disciplinary action by their ombudsman, and could be stopped from operating by trading standards officers. The details are still being arranged but officials believe it could become law by the end of next year.

Investigations by the Consumer Association found some agents did not pass on offers to clients. This was illegal but action against estate agents has been difficult. Similar complaints were found by the Office of Fair Trading this year. In a review of buyers, sellers and 500 estate agents, serious complaints about agents failing to declare personal interests in properties were found.

It appeared that little had changed since the OFT reported in 1999 a range of complaints: buyers being told their offer would not be passed on unless "qualified" by the agency's financial adviser; sellers being falsely told the law required them to sign agreements with an agent, and for-sale boards being used inappropriately for free advertising. The OFT disappointed consumers' groups this year by stopping short of recommending a statutory registration scheme. It called for better and more widespread self-regulation.

Whitehall sources said the change would be seen as a "negative registration", making it impossible for estate agents to continue trading if they were removed from their association list. But it will be up to the association and the ombudsman to police the system.

The ombudsman scheme, approved by the OFT, is supported by only 36 per cent of Britain's estate agents. But there is widespread support in the association for such a move. Peter Bolton King, the chief executive of the NAEA, said the association had already passed a resolution to introduce a mandatory redress scheme by 2006, based on the system the Government plans.

There is growing pressure at Westminster for regulation of estate agents. Clive Betts, a former government whip, has tabled a Commons motion calling for tougher regulation. He said solicitors, surveyors, home inspectors and financial advisers were all subject to regulation, but estate agents were not. "It is time for some action on this," he said.

The OFT report in March warned estate agents that they could be forced to join a compulsory code of conduct if they did not improve their standards. It said the Estate Agents Act needed to be changed to drive out those "unfit to practise" and to combat bad conduct. More competition over fees was also needed, said the report.

The government Bill, which will be used to implement the new code, also introduces the controversial home-information pack for sellers, which places a responsibility on the sellers or their estate agents to provide a pack of standard information documents for prospective buyers. The scheme was thrown out in 2000 because of fears it would cause delays in sales, and raise the cost of home-buying, with the buyer paying.

The Bill also curbs abuses of the right-to-buy scheme for tenants of private property, and allows same-sex couples to secure assured secure and introductory tenancies.