MP calls for FCA regulation of estate agents

Mark Garnier, MP for Wyre Forest and a member of the Treasury select committee, has called for greater regulation of estate agents to help clampdown on rogue salespeople operating in the industry.

Given the large amount of money involved in most property transactions, the Conservative MP wants to see all property sales handled by estate agents regulated by the Financial Conduct Authority (FCA).

He said that it was “incredible” that the estate agency industry was not more closely supervised, especially as buying property is the “single biggest and most important financial transaction” that most people are likely to ever make.

He added: “It is where they will spend their life, bring up their family and, in repaying their mortgage, where they will accumulate a huge proportion of their lifetime capital savings. So it is incredible that estate agents do not fall under any formal regulation or supervision.

“Given that participants in markets, such as stocks and shares, are regulated it seems reasonable that the scope of the conduct regulator should be extended to cover the property market.”

However, Martin Wheatley, Chief Executive of the FCA, has rejected taking over regulation of the sector saying resources were already far too “stretched”.

Speaking to the Treasury select committee last week, Wheatley said regulating estate agents would overstretch the FCA. “I don’t think it should be. Partly it’s because our resources are very, very stretched given the things we are doing.

“Also, we are consumer champion for financial products but the purchase of a house is quite separate from the taking out of a mortgage, even though they are related.

“We do regulate the mortgage but we don’t get involved in the purchase of the house whether it be the valuation or whether it is good value.”

Peter Lawrence at Lawrence Rand added: “We welcome anything that helps raise standards across the industry and that would eradicate unscrupulous and dishonest operators.”