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Estate agents are to come under the scrutiny of the Office of Fair Trading (OFT) in a study of the home buying and selling process, it was announced today.
The consumer watchdog said it planned to look at the level of competition between estate agents and other providers in the market in terms of price and quality of service. It will also consider how easy it is for new groups such as internet property retailers to enter the market.
The announcement came as the government unveiled further changes to its controversial home information packs (Hips), including a requirement that homeowners must compile a pack before they put their property on the market.
Announcing the market study, OFT chief executive, John Fingleton, said: "Buying or selling a home is something most people do only a few times in their life, but it is usually the biggest transaction they will make.
"We want to ensure that consumers are served well when buying or selling a home and are supported by an effective, competitive and innovative market."
He added that before embarking on the study, which will begin early next year, the group was consulting with the government, industry and consumer bodies about the issues on which it should focus. These are likely to include the extent to which consumers' interests are protected by the existing regulatory framework.
Hips rules change
Meanwhile, the government said it was ending the current rule allowing people to begin marketing their property as soon as they commission a Hip, and to continue to do so for up to 28 days before they receive the pack.
Instead, from April 6 next year vendors will not be allowed to put their home on the market until they have all the key documents for the pack in place, although they will still have up to 28 days to provide certain information, such as the property search.
The rule change had been expected to come into force at the end of the year, and had already been pushed back from June 1.
The government said a recent survey of 16,000 transactions showed that where a Hip was available to buyers, property exchanges were completed six days quicker than where one was not.
It added that some homeowners were paying for packs they never received, while some estate agents were using the exemption period to avoid complying with the regulations.
The packs will also have to contain a property information questionnaire. This will include information on the flood risk to a property, gas and electricity safety, service charges, structural damage, parking arrangements and details relating to leasehold properties.
The housing minister, Margaret Beckett, said: "It is essential that all buyers are able to see the Hip as early as possible to ensure they are benefiting from this important information, and that sellers are getting to see the pack they are paying for."
Hips aim to speed up the home buying and selling process by providing people with more of the information they need up front. Their introduction has been controversial, however, with commentators warning they could deter people from putting their homes on the market to test the water.
But the government said independent research had shown the packs were not impacting on house prices or hindering transactions.
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