New proposals to boost small businesses that support home buyers and sellers
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13 September 2012 - BIS
Businesses hosting private
property sales advertisements, without getting involved in the sales
process, will no longer be subject to various regulations aimed at
estate agents, Consumer Affairs Minister, Jo Swinson announced today.
Following on from the Red
Tape Challenge, the Government’s response to the consultation on
amending the Estate Agents Act to encourage new business models
confirms plans to exempt intermediary agents which help
homeowners privately advertise and sell their houses from the Estate
Agents Act 1979 (EAA). Government will also repeal the Property
Misdescriptions Act 1991 (PMA) which currently requires these
businesses to check the accuracy of advertised property details. The
PMA has largely been superseded by the Consumer Protection from Unfair
Trading Regulations and the Business Protection from Misleading
Advertising Regulations, which can be applied more flexibly and have a
wider range of enforcement measures and protections.
The measures will ensure that these businesses do not face
disproportionate costs as a result of regulations intended for
traditional estate agents.
Jo Swinson said:
“A flourishing housing market is hugely important to the economy, and
one of the ways to boost it is to cut through bureaucracy and allow
people to buy and sell more easily. This is why we are proposing to
change the rules so that businesses that facilitate private property
sales aren’t caught out by the regulations for estate agents.
“These intermediaries help buyers and sellers contact each other at a
low cost, but don’t engage in other estate agent activities, so it’s
unfair to expect them to go out and check all the property details of
all the sellers on their websites. Reducing the regulations for these
businesses will open up the market and increase choices for consumers
looking to save costs when buying or selling a property.
“Selling privately can be a useful and cost efficient method, but
consumers should always make sure they are well informed about the
different levels of protection offered by these businesses compared to
traditional estate agents.”
Whilst most people prefer to use estate agents to sell their house,
some opt to do the work themselves and sell privately in order to save
on estate agent fees. In recent years, web-based intermediaries and
portals have started hosting private property sales advertisements, but
stop short of getting involved in the sales process. These types of
intermediaries have low costs, and do not engage in estate agents
activities, such as providing advice. Currently however, they may still
be defined as estate agents under the EAA.
These changes arise from the Disruptive Business Models theme of the
Government’s Red Tape Challenge. Government will bring forward an
amendment as soon as the parliamentary timetable allows.
Notes to editors
1. The consultation response is available to view at http://www.bis.gov.uk/Consultations/category/closedwithresponse
2. The Red Tape Challenge Disruptive Business Models theme can be found
The other outcomes of this theme will be announced later this month.
3. The OFT has today issued new guidance to property sales businesses
to help them understand their responsibilities under the Consumer
Protection from Unfair Trading Regulations 2008 and the Business
Protection from Misleading Marketing Regulations 2008.
4. The guidance will explain which activities are exempted from
regulation, which include:
• providing a mechanism for buyers to search for details of properties
in a particular area;
• providing a means for buyer and seller to communicate with
one another directly;
• providing a For Sale board to advertise properties for sale
and where further details can be found;
• providing the seller’s basic property details to a
prospective buyer on request; and
• signposting to freely available information, or to
businesses that offer ancillary services.
5. The guidance will also show those activities that will remain within
the scope of the EAA, which include:
• providing advice to a seller or a prospective buyer about a
• acting on behalf of the seller;
• preparing property details on behalf of a seller;
• involvement in the negotiation process over the sale or
purchase including passing on offers to buy; and
• referrals and recommendations to particular third parties
providing ancillary services.
6. The Red Tape Challenge was launched by the Prime Minister in April
2011 and is systematically examining some 6,500 substantive regulations
that the Government inherited with the aim of scrapping or
significantly reducing as many of them as possible. It gives business
and the public the chance to have their say, by theme, on the
regulations that affect their everyday lives. It has also asked the
public what red tape holds back Disruptive Business Models and Civil
Society Organisations. The Government announced on 10 September 2012
that at least 3,000 of the regulations examined will be scrapped or
reduced. More information on Red Tape Challenge is at www.redtapechallenge.cabinetoffice.gov.uk
7. The Government's economic policy objective is to achieve 'strong,
sustainable and balanced growth that is more evenly shared across the
country and between industries.’ It set four ambitions in the ‘Plan
for Growth’ (PDF 1.7MB), published at Budget 2011:
• To create the most competitive tax system in the G20
• To make the UK the best place in Europe to start, finance
and grow a business
• To encourage investment and exports as a route to a more
• To create a more educated workforce that is the most flexible in
Work is underway across Government to achieve these ambitions,
including progress on more than 250 measures as part of the Growth
Review. Developing an Industrial Strategy gives new impetus to this
work by providing businesses, investors and the public with more
clarity about the long-term direction in which the Government wants the
economy to travel.
About the Author
© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.
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Article Published/Sorted/Amended on Scopulus 2012-09-19 08:56:39 in Business Articles