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 Milford House 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.