OFT's market study on home buying and selling

This report was published on the 18th February.

It makes interesting reading.

A number of points stand out to me.

1. 64% of sellers do not negotiate a fee with an estate agent.They simply accept the agent's percentage without a quibble. It seems that at this stage in the process a seller is concentrating on maximising the price he can get. Maybe a seller cannot work out the amount he is agreeing to pay. Contrast this with solicitors. Almost every conveyancing fee is negotiated. I am aware of clients changing solicitors to save a fiver - yet the solicitor performs the most important and responsible part of the system. The public need much more education as to the solicitor's role.

2. The OFT considers it too costly to regulate estate agents.

3. The OFT accept that there is a wholesale and retail market in HIPs. Thus it is perfectly OK for an estate agent to buy in a HIP from a solicitor or a HIP provider and add on a charge for himself without saying a word to the client. This represents another reason why sellers should use solicitors for the provision of HIPs. They will be charged only the cost of the disbursements plus a fee for putting it all together. No money for nothing.

4. There is a recommendation that referral fees be banned because of potential conflicts of interest. Hear hear. This is the current conventional wisdom - even Jackson in his review on civil litigation costs is suggesting these fees be banned. To me it now seems inevitable.

5. The OFT agree with me that HIPs have had a neutral effect on the market but are useful in the provision of upfront information - exactly what I have been saying.

6. Then we have the old chestnut suggesting that we in England and Wales can learn from the Scottish system. In 40 years of practice I have never found anyone who could tell me precisely how they buy and sell houses in Scotland. This report does not tell me and I am none the wiser.