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Ignorance is not bliss for first time property purchasers 7th May 2013

With the property market gradually opening up to first time buyers, worryingly, almost a third admit they do not have a good understanding of the purchase process when making the biggest purchase of their lives. Furthermore, almost 80 per cent believe that compulsory regulation of estate agents would ensure consumer understanding improves.

Since the government’s various initiatives to assist buyers have been introduced, an increase in accessible mortgage products has led to an upturn in activity across the country with more first time buyers now able to get a foot on the ladder. Worryingly, though, 29 per cent claim they did not have a good understanding of the purchase process when buying their home, and 30 per cent also claim that their agents failed to even advise them on their transaction.

With no statutory regulation in place to ensure agents are suitably qualified to sell property, and with public understanding at such a low level, understandably, the majority of first time buyers (77 per cent) believe that consumer understanding would improve if compulsory regulation were introduced.

Agents who are not members of a professional body are not obliged to meet minimum competency standards or regulated against them. This means that consumers are potentially dealing with an agent who, while technically abiding by existing legislation, could be providing inaccurate advice.

With the market now seemingly over the very worst, more needs to be done to ensure agents understand what they are doing when it comes to the complex procedures involved in the selling process and advise their clients accordingly. RICS would like to see all estate agents required to sign up to a professional regulation scheme that ensures consumers are dealing with an agent who is suitably qualified to broker their sale and advise on the processes involved.

Peter Bolton King, RICS Global Residential Director, said: “When making the biggest purchase of their lives, it’s important that buyers – and especially those who haven’t been through the purchase process before – understand precisely what is involved. This is particularly relevant now, with the market now seemingly over the very worst and more first time buyers being in a position to make a move.

“By using an unregulated estate agent, people are potentially dealing with someone who doesn’t understand the technicalities involved in buying a home or their obligations to consumers. I would recommend that anyone who is buying or selling a house checks that their agent is a regulated member of a professional body, such as RICS, who have met minimum standards of competency and understanding.”

First time buyer responses:

93 per cent believe agents should have to meet minimum competency standards before practicing
23 per cent claim their agent didn’t demonstrate an in-depth understanding of the sales process
30 per cent claim their agent didn’t offer advice on the transaction process
53 per cent claim their agent didn’t make them aware of the difference between a survey, appraisal and valuation
89 per cent believe buyers would be better protected with compulsory regulation

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