House Buyer Bureau, a leading provider in the quick house sale-market, believes that the OFT has missed the opportunity to properly crackdown on unscrupulous operators in the quick house sale sector.
Simon Blunt, House Buyer Bureau Director is disappointed that the OFT has chosen to opt for self-regulation of the industry.
However, Mr Blunt has welcomed the fact that the OFT has ‘fired a warning shot across the bows’ of rogue traders by opening formal investigations into three quick house sale firms for alleged unfair practices that may have led to some customers losing tens of thousands of pounds.
Mr Blunt added: “While the study by the OFT is very welcome as there are ‘rogue traders’ in the industry that are misleading and taking advantage of customers, the OFT has not gone far enough.
“A system with teeth needs to be put in place to weed out those companies that give the sector a bad name.
“We understand the OFT proposal is to form an association of house buying companies with a Code of Conduct with voluntary membership. While this is a step forward for the industry, it does not go far enough.
“House Buyer Bureau strongly believes that membership should be compulsory to all house buying companies that advertise ‘quick house sale’ services.
“We believe there is a need for an independent ‘redress scheme’ with a public body, such as the Property Ombudsman, that has teeth to stamp out the unscrupulous behaviour of some that give the sector a bad name and the power to rule on disputes including making awards of compensation.”
The House Buyer Bureau has been concerned for some time about practices which is why it welcomed the OFT’s scrutiny of the sector.
Mr Blunt added: “The worst two practices are reducing the price offered, without any legitimate reason, at the point of sale, known as gazundering and locking in customers in unfair contracts, known as option agreements, for six months or more which prevents them, through severe penalties for breach of contract, from selling to anyone else for that period.”
All of the House Buyer Bureau’s formal offers are Subject to Contract and a RICS Survey. The survey is conducted by a Chartered Surveyor local to the property and the survey reports are available for inspection by its customers.
The House Buyer Bureau only will reduce a formal offer for a legitimate reason, for example, if the surveyor found the property had structural problems which had a detrimental effect on the value.
Earlier this year the OFT asked more than 50 quick house sale firms, including the House Buyer Bureau, to provide information on their business models and practices.
It wanted to build up a picture of the market and is inviting evidence from people with experience of this sector, including valuation experts, estate agents, debt advisors and home owners after which it will establish whether it needs to take action.