The publication of the final report of Sir Bryan Carsberg’s Review of Residential Property has prompted much debate within the housing industry. Michelle McKenna takes a look at the major findings of the report and tests the industry’s reaction.

In July 2007, the Royal Institute of Chartered Surveyors (RICS), in conjunction with the National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (ARLA), commissioned Sir Bryan to carry out an extensive review of the private residential property market in England and Wales.

His independent report examined the scope and extent of standards, regulation and redress in the sector; considered the broad implications of the current structures for the property transaction itself and made recommendations on future improvements to the system.

Sir Bryan made 30 recommendations in the report, which highlighted three key issues that should be the foundations for reform.

He believes that the property transaction process and the provision of information for consumers need revision. The report states that Home Information Packs (HIPs) have not improved the process as intended and he recommends that that the Government amends legislation to make them voluntary.

This has been welcomed by many in the industry including Nicholas Leeming, major client director of property website propertyfinder.com, who said: “Like a blindfolded featherweight, HIPs have been knocked this way and that by repeated changes, delays and tinkering from a department whose minister has changed almost as often as the rules for HIPs themselves.

“The final product is unrecognisable and makes no attempt to serve its original purpose of speeding up the home buying and selling process - they are nothing but a disruption to the housing market.”

He said HIPs have become about EPCs and the Government’s need to comply with an EU directive on carbon emissions, at the expense of home sellers.

But The Association of Home Information Pack Providers (AHIPP) has defended the role of HIPs, claiming that they are making a difference to the conveyancing process already.

Paul Broadhead, deputy director general, AHIPP said: “It is disappointing that the report calls for Home Information Packs to be made voluntary, research by Connells group shows that on average homes sold with a pack reach exchange of contract some 12 days sooner than those without. I accept that this information is likely to have been published since Sir Bryan finalised his recommendations and am sure that if available earlier, his conclusions may have been different.”

However AHIPP welcomed other aspects of the review, particularly the introduction of a regulatory regime to require those providing agency services to provide better information for consumers and the recommendation that the Land Registry increases the scope of leasehold information it holds.

The review also highlights that regulation and redress schemes need to be consistent with universal participation, and says the current regime of voluntary regulation and redress is insufficient.

David Bexon, managing director of housing website SmartNewHomes.com, agrees and said the industry should welcome the regulatory scheme, adding: “While there is already a high standard of practice across the housebuilding industry, and recent moves have been made to establish further transparency, the proposed regulatory scheme would offer additional protection, while adding to the proficiency of the transaction process for all those buying new build properties.”

Ian Baker, managing director of Galliford Try Homes, also gave his backing adding: “It will ensure enhanced standards across the housebuilding sector. As an industry we are already working towards the introduction of clearer and more robust standards to offer new homebuyers further protection and redress and these latest recommendations will offer further support to an already advancing process.”

Another key point of the review is that consumer interests need to be at the heart of all policy making - a view backed by RICS.

Citing research from Which?, the OFT and ComRes (which was commissioned by RICS to investigate consumer detriment in domestic property transactions), Sir Bryan concludes that the current transaction process is unsatisfactory for those who use it and states that those who offer estate and letting agency services to the public, must be qualified and properly regulated. Lack of knowledge of the systems and frustration with processes are driving dissatisfaction, he says.

But The National Approved Letting Scheme (NALS) says that it already monitors the standards of letting agents within a clearly defined code of standards and processes.

Approved and funded by government, NALS was set up by RICS, NAEA and ARLA together with the Empty Homes Agency, and 1,600 lettings agents in the UK have signed up voluntarily. NALS chair, Caroline Pickering, said: “It would be an unnecessary waste of public funds for the Government to put in place another scheme when one already exists that has the infrastructure, processes and credibility to protect the consumer with the form of light touch regulation advocated by Sir Bryan.

“Why reinvent the wheel? We already have the solution in place for letting agents. NALS is a low cost regulatory option, it can and should be a fundamental (and aspirational) badge required of all lettings agents and we would urge Sir Bryan to recognise and commend the NALS scheme in his review.

“What is needed now is government and industry promotion of the NALS kite-mark to raise public awareness so that consumers will seek to use only NALS accredited lettings firms.”

However, the network of independent estate agents, Spicerhaart, supports greater regulation. Russell Jervis, managing director said: “We have consistently campaigned for the improved regulation of the industry and the universal participation to a redress scheme, such as the Ombudsman for Estate Agents. We believe all agents should be operating from the same level playing field and that there should only be one code of practice.

“We fully support that consumer interest needs to be at the heart of all policy making, and believe stricter licensing laws for agents to register should be implemented. Currently, absolutely anyone can register as an estate agent. All agents should undergo basic training, at the very least, to ensure quality advice and good practice is adhered to.”

RICS says that the review should be the basis for major reform of the residential property sector and in particular endorses the view that consumers should be central to any reform, with emphasis placed on better information and basic protections for any person buying, selling or letting property. And it will now undertake an indepth consultation with the aim of developing a formal response to Sir Bryan’s recommendations.

Speaking at the launch of the report, Gillian Charlesworth RICS director of external affairs said: “Sir Bryan’s review highlights a number of key areas where the current approach is clearly failing. The processes for regulation and redress do not go far enough to protect the consumer and we agree that participation in regulatory and redress schemes needs to be both consistent and universal. They should include all estate agents, letting agents, managing agents and landlords.

“The industry itself is already coming together to tackle these issues, through the creation of the industry standards board, however there are limitations as to what this voluntary approach can achieve.

“It is important that we all take steps now to make the necessary improvements. We need action not words. Government needs to acknowledge this, deliver its support for industry action and do more to protect the public.

“We remain committed to building a coalition that can deliver property policy reform.”

Also speaking at the launch, Peter Bolton King, chief executive of the NAEA, said: “The estate agency sector in the UK is far from perfect and whilst the whole raison d’etre of the NAEA since its inception has been to promote and encourage best practice and provide a quality training infrastructure for agents, we know there is still more to be done”.

He said that the NAEA “wholeheartedly endorsed” the recommendation that all agents practicing in the UK should be registered by an official body and regulated by independent standards and explained that although the NAEA and RICS are already working to set up an independent standards board it is still voluntary for estate agents to be part of a regulatory body.

Bolton King said that Sir Bryan’s insights into consumer behaviour, and the lack of knowledge that many buyers and sellers have of the workings of the property buying process is a “strong wake up call” to the sector and pledged to work closely with its members to look at ways to improve communication with the general public.

He also welcomed the proposals to simplify and speed up the legal processes surrounding house purchases and sales and was delighted by the recommendation to make HIPs voluntary. While everyone has their own opinion on Sir Bryan’s recommendations, what is clear is that there is plenty of work to be done to take the industry forward and the review will form a sound basis to build upon for the future.