The Carsberg review has concluded that the residential property market is not working well, because clients are not well informed about the qualifications of different agents, or about what to expect from them in the way of service. The review has recommended that regulation of the market should be moved from the Office of Fair Trading to a new regulator.
The review also found that the market is not effective in finding better ways of completing transactions because the processes are complex and most consumers do not understand the processes or the alternatives that are available.
The new regulatory regime would apply to those offering agency services in the property sector. This would include estate agents, landlords as well as letting and managing agents.
The review argues that although the current legislation needs reform and changes could bring improvements, regulation is seen as a better option. Regulation will allow for the establishment of a standards board that would be the best kind of organisation to maintain a coherent body of standards, ensure that they are consistent with a set of clear principles and keep them up to date.
The review report has been welcomed by the Royal Institution of Chartered Surveyors which believes that it should be the basis for major reform of the residential property sector. In particular RICS endorses the view that consumers should be central to any reform, with emphasis placed on providing better information and basic protections for any person buying, selling or letting property.