With property prices rising over 30% in Waltham Forest in the last year alone, ensuring everyone can access affordable and quality housing in Walthamstow has become a key concern for many local residents. That’s why this is the focus of our local Home Sweet Home campaign.
As the local housing market has become more volatile it is clear there is substantial competition for properties between agents, leading to different ways of selling to earn commission. Many agents use ‘sale by informal tender’ contracts – where buyers submit sealed bids to make offers on properties. Some agents using these contracts are then charging the successful bidder an ‘introductory’ fee – in some cases of 2-2.5% of the property fee + VAT. Sellers are also charged a fee to market their property in this way at the same time. You can read more about an agent in Walthamstow using this practice and the fees they charge here.
This practice leaves both sellers and buyers short-changed. Buyers often end up lowering their offers to accommodate the additional cost of paying such a fee- which can be several thousands of pounds- meaning the seller will receive less for their asset and may lose opportunities to sell their property to those who cannot afford such a charge. There is also a conflict of interest for the estate agent to receive money from two parties to the same sale, as it is not clear in whose interests they operate. The only party benefiting in this arrangement is the agent pocketing a substantial fee
Earlier this year I wrote to all the local estate agents operating in Walthamstow, challenging them to oppose these practices given the harm they do to consumers and our local housing market. Following this, seven agents have joined our call to end this practice and confirmed that they will not use these types of agreements. I want to make sure Walthamstow residents- and prospective residents- are aware of those who have said they don’t and won’t double charge:
Outlook Residential Property Agents, Spencers Property, 21st Century Land, Central Estate Agents, Strettons, the Stow Brothers, Estates 17, Churchill Estates and Kings Group have all confirmed to me that they do not support these agreements or use these types of contracts. Here’s what they had to say about the practice:
- “[We] are completely against ‘double charging’ and agree that the sale method blurs the lines between client and customer. We believe the practise only benefits the agent.” – Stow Brothers
- “We wholly support your efforts to outlaw the practice of agents charging both buyers and sellers” Strettons
- “In regards to ‘sale by tender’ … we are strongly against such practice.” – Central Estate Agents
- An “unsavoury practice” 21st Century Land
- “We do not chose to sell property by this method” – Spencers Property
- “We appreciate it’s a different option for a seller however it merely ensures the buyer pays more and due to current supply and demand the agent earns a higher fee down to the desperation of the buyer!” Outlook Estate Agents
- “We have never had any involvement with Sale By Informal Tender or Sealed Bids. Our aim is to work with the present and future local community, not against it.” – Estates 17
- “Kings Group never has or ever would advocate double charging on the sale of any of our properties across any of our branches.” -King’s Group
- “[It's] totally unfair on all parties and basically an under hand way of agents exploiting a market place.” – Churchill Estates
I urge potential home buyers and sellers in Walthamstow to ask the remaining estate agents operating in our area who have not yet responded to these concerns if they use such contracts, and if they do use them how they justify ripping off consumers in this way. I would also encourage residents to ask agents to pledge not to use these contracts – as these six firms have done so- and to congratulate those companies which have backed the Home Sweet Home campaign, supporting a fairer housing market in Walthamstow. If you are an estate agent selling properties in the Walthamstow area and wish to confirm you do not use these contracts and so would like to be added to this list please do get in touch. I will also continue to campaign for these contracts to be outlawed in Parliament too.
Members of the Walthamstow Home Sweet Home Campaign will be in Walthamstow Town Square on Saturday 9 August from 1.30pm as part of their campaign to improve access to quality housing for all local residents. They have organised a ‘listening space’ for residents to tell their stories about the good and bad in Walthamstow’s letting agents, landlords and estate agents.
Speaking about the campaign local MP Stella Creasy said:
‘Housing is one of the top issues Walthamstow residents raise with me – its little wonder so many feel they are getting a raw deal with house prices and rents shooting sky high in the last year. The problems residents face we are campaigning on are not just about the cost of housing- we have heard about many problems with damp to extortionate fees and rent hikes as well as misleading information and charges which distort the prices people face to rent or own in our community.
These awards are our way of fighting back as a community and holding to account those seeking to exploit London’s housing shortage as well as recognising the good agents and landlords who do treat people fairly. I hope residents will join us to show we won’t tolerate this behaviour and make sure Walthamstow can be a Home Sweet Home for everyone’
The campaigners have organised the E17 Local Living SOS Awards to highlight agents and landlord behaviour. On they day they will be spinning the ‘wheel of misfortune’ with some of the common problems tenants and home seekers face in Walthamstow, as well as a model house to show the poor conditions some in the local community face. They have been working with the Movement for Change in Walthamstow to help tenants and residents challenge poor behaviour. Nomination forms for the awards scheme can be found on Stella Creasy’s website. Nominations close on 1 September 2014.
- Land Registry data shows that Watlham Forest has had the highest annual price increase of 26.3 per cent, increase taking the average price of buying a property in Chingford, Leytonstone and Walthamstow to £327,784.
- According to the 2011 Census, about one in four households in Waltham Forest (26 per cent) now live in private rented accommodation, up from 16 per cent in 2001. Average rental values for new tenancies in London (£1,348pcm) were £116 more expensive per month when compared to average rental values in May 2013 (£1,232pcm) According to the Homelet Rental Index, the average increase in Rents in East London in the last year was 9.3%, with the average rent now £1,366 compared to £1,249 in 2013.
- Campaigners working with Stella Creasy MP and the Movement for Change started the Home Sweet Home campaign in Walthamstow in 2014 following evidence of the problems many residents faced accessing housing.
- The campaigners have run a series of workshops and events to identify the causes of rising rents and house prices in Walthamstow in the last year including meetings in parliament with experts and local workshops around Walthamstow.
- The categories for the E17 Local Living SOS awards cover landlords, letting agents, estate agents and social housing providers and categories include ‘Best’ and ‘Worst’ letting agent, ‘best’ or worst’ offer to completion and even ‘Most Inventive Excuse’!. The deadline for nominations is Monday 1 September 2014.
- To find out more about this campaign or to become involved please contact Ruby on 020 8521 1223 or firstname.lastname@example.org.
As part of our Home Sweet Home campaign here in Walthamstow we have decided to hold landlords, letting agents and estate agents to account for their conduct by creating the E17 Local Living: SOS!’ Awards to highlight the good, the bad and the ugly of our local housing. I’d now like to encourage all residents to contribute to this scheme by contributing their nominations for these awards.
We’ve split the awards up into four categories:
All nominations are confidential – categories include topics such as from ‘Best’ and ‘Worst’ letting agent, ‘best’ or worst’ offer to completion and even ‘Most Inventive Excuse’!
Please encourage as many local residents as possible to nominate – the deadline for nominations is Monday 1 September 2014. If you would like to get involved in this this campaign please contact Ruby on 020 8521 1223 or email@example.com.
Speaking ahead of a key vote in Parliament on Monday 16 June regarding double charging by estate agents Stella Creasy MP said:
“Everyone has heard horror stories about buying a home- but the kinds of behaviours we’re seeing now with fees and charges are fast becoming a nightmare. Charging buyers a fee to be ‘introduced’ to a property as part of a ‘sale by tender’ contract means many have to offer a lower price to sellers to be able to cover this cost. That sellers are also being charged by estate agents at the same time for their services only compounds the consequences of this conflict of interest.
Put simply, how can an agent act in the interests of both a buyer and a seller in a house purchase at the same time without one party losing out and having to pay for the privilege? it seems to me the only people who do well out of these deals are the agents who get a nice fat fee from billing both the buyer and the seller.
We know first hand the problems these are causing to homebuyers in Walthamstow -I’ve spoken out before to challenge the behaviour of Douglas Allen in leading this practice and now we know others in the area are doing this too and that it is now happening across the country. It is additional costs like these that can make it even harder for people to get on and up the property ladder- and with house prices rising nearly 30% in one year here in Waltham Forest alone every further charge is squeezing people already struggling with the cost of living.
That’s why I’m pleased to be leading Labour’s efforts to tackle this issue- I hope on Monday 16 June the Government does a U-turn on their opposition to our plans and joins us in saying this double charging must stop. ”
Parliament will vote on Monday 16 June 2014 on Labour’s plans to end double charging as part of Labour’s proposals to improve the Government’s Consumer Rights Bill. Stella also called for anyone affected by these charges to help this campaign by reporting the Agents using these practices to the Property Ombudsman, stating :
“We have already reported the examples of these problems to the Property Ombudsman, but I also urge anyone in our community affected by these practices to complain as well so that we can gather more evidence of just how widespread these kinds of contracts and charges are.”
The Property Ombudsman can be contacted on the following details: The Property Ombudsman
43-55 Milford Street, Salisbury, Wiltshire SP1 2BP or via Telephone 01722 333306
- In the last year, 1 million homes were bought in the UK, up from 930,000 In 2012.
- ‘Sale by informal tender’ contracts involve using sealed bids to make offers on properties. Increasingly, estate agents are then charging the successful bidder an ‘introductory’ fee – in some cases of 2-2.5% of the property fee + VAT – as a ‘finders fee’ to the agent.
- On 6th March 2014 the Government voted against proposals to allow this practice to challenged in court. The issue will be debated again in the House of Commons on Monday 16th June 2014 when all MPs will have the chance to vote for Labour’s plans to end double charging.
- From 1 April 2014 the regulation of all Estate Agents in England and Wales was transferred to Powys County Council Trading Standards. Labour also voted against this and called for a clear framework for alternative dispute resolution to be put in place to protect consumers.
The meeting decided on three priorities for action for both housing and healthcare. They were as follows:
- Recruiting residents to patient involvement groups
- Campaigning for a right to recall GPs
- Identifying doctors surgeries where residents can’t get appointments to raise with Commissioners
- Producing a guide for tenants on their rights
- Awarding a ‘Razzie’ to the most badly behaving local letting agents and estate agents
- Helping report bad landlords to the enforcement team at Waltham Forest Council
If you would like to help with any or all of the above actions in the months ahead please do get in touch.
Over the last few months hundreds of residents have been reporting the problems they face with healthcare and housing access in Walthamstow- from rip off fees from estate agents and letting agents, to not being able to get through on the phone to their doctors surgery or waiting weeks for an appointment when they do.
As part of our research into these problems, I’ve invited national experts to come and meet with residents affected in parliament on Tuesday 1 April 2014 – I’m delighted that Jamie Reed MP, the Shadow Health Minister and Emma Reynolds MP, the Shadow Minister for Housing, can join us to hear first hand from residents affected by these problems and help us decide how to act. I’m also pleased representatives from Shelter, The Hackney Law Centre, Crisis and Healthwatch will also be attending to give their expertise on the problems we have identified in Walthamstow. We’ll be asking them for their ideas on how to challenge those landlords or agents who rip residents off, and those doctors who aren’t listening to local people.
If you have concerns about healthcare or housing in Walthamstow and would like to contribute to this discussion please RSVP to firstname.lastname@example.org for further details and to confirm your attendance. Please do also feel free to share this invitation to any other Walthamstow resident who you believe is concerned about these issues. If you can’t attend but would like to help us in the campaign to improve access to housing and healthcare please do also contact my office.
MPs today sounded the alarm about the Government’s plans to downgrade the oversight of Estate Agents as they pushed forward plans to transfer responsibility for the regulation of the entire England and Wales industry to the Powys and Anglesey Council Trading Standards. With new evidence estate agents are taking advantage of the demand for properties to introduce charges for both buyers and sellers Shadow Consumer Minister Stella Creasy said :
“With the terms and conditions of contracts for buying and selling houses causing increasing concern, now is not the time to turn a blind eye to these problems. There is evidence from the London housing market that Estate Agents are now introducing new contracts which involve charging buyers a fee to be introduced to a property. This means they have to offer a lower price for a property as they have to cover this cost as well as the purchase price. Consequently sellers could get less money for their property despite also paying for the estate agent’s service. The only people who do well out of these kinds of ‘sealed bid’ deals are the agents who get a nice fat fee from both the buyer and the seller. The Ombudsman calls this an ‘emerging commercial practice’ meaning it may be starting in London but without quick action it could spread across the country.
“It is problems like these that make me disappointed that the Government is pressing ahead with plans to give the oversight of all estate agents in England and Wales to the Powys County Council Trading Standards and isn’t reforming the provision of Ombudsman services to give consumers a uniform complaints process. Many home buyers are frightened to challenge the agents and these unfair contract terms as they think they will be locked out of our housing market as a result, compounding the risk there could be an enforcement gap developing. That’s why we need for a fresh approach which gives consumers real protection. Labour won’t be supporting these proposals today because of this and will be pushing the Government to think again – we are determined to give Britons the consumer rights they really need to get a fair deal.”
- In the last year, 1 million homes were bought in the UK, up from 930,000 In 2012. Yet there are signs a new form of contract is being used by estate agents to take advantage of the high levels of demand for properties. These ‘sale by informal tender’ contracts involve using sealed bids to make offers on properties. As part of this practice, some estate agents are then charging the successful bidder an ‘introductory’ fee – in some cases of 2-2.5% of the property fee + VAT – as a ‘finders fee’ to the agent. For a copy of such a contract and to speak to a home buyer affected by these charges please contact the Office of Stella Creasy MP.
- from 1 April 2014 the OFT will be abolished on and its consumer law enforcement functions transferred to other bodies. At present the Government is refusing to set out its proposals to put into force the European Directive on dispute resolution which will require every consumer to have access to a mediation process to resolve problems. Without this protection the moves to transfer the OFT’s powers and lack of clarity about the role of Ombudsmen could leave an enforcement gap In which sharp practice by estate agents and letting agents could flourish.
- On Monday 10th February Labour will vote against plans to transfer the functions of the OFT to the Powys Trading Standards and call for a clear framework for alternative dispute resolution to be put in place to protect consumers. This will be contained in the Draft Public Bodies (Abolition of the National Consumer Council and Transfer of the Office of Fair Trading’s Functions in relation to Estate Agents etc) Order 2014.
- In 2012 the Property Ombudsman received over 4,200 complaints about sales – a 7.5% increase on the number of complaints received in 2011. http://www.tpos.co.uk/downloads/reports/TPO%202012%20Annual%20Report.pdf