The
housing crisis continues to grow.
As
I write, Shelter publishes its latest report confirming that more than 90,000
children in the UK without a permanent home, living in some form of temporary
accommodation. Meanwhile, 9 million people now rent privately including over
1.3 million families with children. Nearly half of private rented
households are over the age of 35.
It
is undoubtedly the case that, whenever any market is unstable, some people will
seek to exploit the situation for their own benefit. I have written before
about those letting agents who are double-charging, purporting to act for both
the landlord and the tenant and providing a complete lack of transparency of
their fees.[i]
It
is now clear that some estate agents are pulling off a similar trick, charging
both buyers and sellers for a sale of the same property. This practice creates
a conflict of interest, as it is not clear who the agent is represent. With
some agents charging buyers 2.5% of the sale price of a property that fee can
run into thousands of pounds.
The
average home is now eight times the average wage, and it takes over 20 years
for the average family to save for a deposit. In the last year, 1 million homes
were bought in the UK. House prices rose by nearly 12% over the last
year.
It’s
in this context that many estate agents have introduced a new form of contract,
called ‘sale by informal tender’ involving sealed bids to make offers on
properties. Estate agents are then charging the successful bidder an
‘introductory’ fee, but also charging a fee sellers to market their property in
this way.
The
practice is rapidly spreading from London to the rest of the UK. It’s a rip-off
and it needs to be stopped quickly. We have a chance to do this in the Consumer
Rights’ Bill, currently in the House of Lords.
