Angry buyers finding their voice

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The Ombudsman for Estate Agents has reported a "surprising" workload dealing with complaints despite the property market slump.

While activity dropped by as much as 60% in 2008, Christopher Hamer said sales disputes dropped by just 3%.

The Ombudsman, who aims to resolve disputes between agents and consumers, expects the majority of his work in 2009 to shift to the rental market.

One trade body is warning of an influx of unqualified agents to lettings.

The Association of Residential Letting Agents (Arla) said many estate agents were expanding their businesses to cover lettings in a bid to survive the housing market downturn.

Market change

The economic climate and squeeze on mortgage lending contributed to a sharp decline in house prices and demand for homes in 2008.

In order to make the transition from an estate agent to a lettings agent, they need to have studied more than 100 different pieces of legislation Ian Potter, Arla

But there was little change in the number of cases being raised by angry buyers and sellers with the Ombudsman.

"I am surprised that my workload in sales disputes has not reduced more significantly," said Mr Hamer.

"Perhaps it shows that buyers and sellers have still higher expectations of agents' service while there are so few properties being sold."

He received 1,043 new cases in 2008, split between 743 for sales and 300 for lettings. This total was a rise of 20% on the previous year and 78% up on 2006. In 65% of cases the complaint was upheld, with the majority of compensation awards were between £100 and £499.

Letting fears

During the slump some agents have been moving towards the rental sector where various reports have suggested would-be sellers have been putting homes up to let instead.

In a survey of its members, Arla said 76% reported that estate agents in their local area had moved into lettings as a result of the downturn in the sales market in the last six months.

The trade body believes that a high proportion of these agents are not being regulated properly or meeting the required standards for lettings agents.

"This is a big concern for landlords and consumers," said operations manager Ian Potter.

"In order to make the transition from an estate agent to a lettings agent, they need to have studied more than 100 different pieces of legislation, and pass minimum competency tests to ensure their ability to advise clients to the required standards."

'Middle classes suffer'

The report comes on the same day that the National Association of Estate Agents claimed that the value of family three and four-bedroom houses has been the worst hit in the housing market slump.

The association said that top-end, executive properties had increased in value between January and February. The same was true of smaller, two-bedroom homes.

"This suggests that people who are buying are picking up smaller houses than they may have done previously, possibly because they can only get smaller mortgages. It may also reflect a trend of downsizing," said chief executive Peter Bolton King.

He claimed that sellers were consistently over-pricing properties.

Meanwhile, in another blow to would-be buyers, the UK's largest building society the Nationwide has announced it was increasing its mortgage rates for new borrowers by up to 0.3%.