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'Quick house sale' firms face action by OFT 'Quick house sale' firms face action by OFT
(about 11 hours later)
Three "quick sale" companies that promise to sell properties for struggling homeowners are to be formally investigated by a regulator.Three "quick sale" companies that promise to sell properties for struggling homeowners are to be formally investigated by a regulator.
The as yet unnamed businesses promised faster sales than could be achieved on the open market for a knock-down price.The as yet unnamed businesses promised faster sales than could be achieved on the open market for a knock-down price.
But the Office of Fair Trading (OFT) is investigating alleged unfair practices that left some sellers tens of thousands of pounds out of pocket.But the Office of Fair Trading (OFT) is investigating alleged unfair practices that left some sellers tens of thousands of pounds out of pocket.
It found many other operators in the sector to be "open and fair".It found many other operators in the sector to be "open and fair".
Alleged exploitationAlleged exploitation
Quick house sale providers offer to buy houses in as little as seven days, but at a discount - typically between 10% and 25% - of the full market value.Quick house sale providers offer to buy houses in as little as seven days, but at a discount - typically between 10% and 25% - of the full market value.
The OFT discovered cases which saw reductions of up to 53% of the home's market value, amounting to many tens of thousands of pounds.The OFT discovered cases which saw reductions of up to 53% of the home's market value, amounting to many tens of thousands of pounds.
The service may be used by those wishing to pay off debts, people facing declining health, or those relocating overseas or moving for a new job. It remains niche, representing only 0.5% of UK residential property sales. Total sales are estimated at between £500m and £900m.The service may be used by those wishing to pay off debts, people facing declining health, or those relocating overseas or moving for a new job. It remains niche, representing only 0.5% of UK residential property sales. Total sales are estimated at between £500m and £900m.
The regulator found that, for the most part, the sector was "dynamic and innovative", benefiting many customers who wanted a quick, hassle-free sale.The regulator found that, for the most part, the sector was "dynamic and innovative", benefiting many customers who wanted a quick, hassle-free sale.
However, its investigations, which began in April, uncovered examples of firms exploiting people's difficult financial circumstances. They included:However, its investigations, which began in April, uncovered examples of firms exploiting people's difficult financial circumstances. They included:
After putting the industry under the microscope, the OFT has now launched formal investigations into three firms, which have not been named. Consumer group Which? has called on the regulator to name the trio.After putting the industry under the microscope, the OFT has now launched formal investigations into three firms, which have not been named. Consumer group Which? has called on the regulator to name the trio.
Another 120 firms have received letters from the OFT advising them to check that the way they operate complies with the law.Another 120 firms have received letters from the OFT advising them to check that the way they operate complies with the law.
"Responsible quick house sale firms offer a valuable service to consumers who want a fast sale. However, we have also seen potentially illegal behaviour," said OFT director Gaucho Rasmussen."Responsible quick house sale firms offer a valuable service to consumers who want a fast sale. However, we have also seen potentially illegal behaviour," said OFT director Gaucho Rasmussen.
"When sellers get a bad deal, they could lose a lot of money. We want to ensure that consumers can have confidence in this sector and put an end to these shoddy practices.""When sellers get a bad deal, they could lose a lot of money. We want to ensure that consumers can have confidence in this sector and put an end to these shoddy practices."
Reacting to the OFT's investigation, Peter Bolton King, of the Royal Institution of Chartered Surveyors (Rics), said: "Clearly, there will always be a premium to pay for those who need to move rapidly but there is no justification whatsoever for unethical or underhand practices."
Gillian Guy, chief executive of Citizens Advice, said: "Often people want a fast house sale because they have to move at short notice for work or need to pay off debts. Rogue operators must be tackled so that people can be confident they are dealing with a trustworthy, responsible company."
Sale pricesSale prices
During an investigation last year, the BBC spoke to two people who were angry at the way they had been treated by quick sale companies.During an investigation last year, the BBC spoke to two people who were angry at the way they had been treated by quick sale companies.
Malcolm Haywood, from Lincolnshire, wanted to sell his house quickly and agreed to a sale price of £120,000.Malcolm Haywood, from Lincolnshire, wanted to sell his house quickly and agreed to a sale price of £120,000.
But just before the deal was signed, the company involved, Gateway Homes UK, dropped the price to £80,000.But just before the deal was signed, the company involved, Gateway Homes UK, dropped the price to £80,000.
Pat Hardy, from Teesside, signed a similar deal with Tom Craven Property.Pat Hardy, from Teesside, signed a similar deal with Tom Craven Property.
She had agreed a purchase price of £75,000, but the day before the removal men were due to arrive, they lowered the offer to £40,000.She had agreed a purchase price of £75,000, but the day before the removal men were due to arrive, they lowered the offer to £40,000.
Both companies insisted that the number of complaints amounted to less than 1% of their customers.Both companies insisted that the number of complaints amounted to less than 1% of their customers.
The OFT has published a series of top tips for consumers considering whether to use quick house sale companies.The OFT has published a series of top tips for consumers considering whether to use quick house sale companies.
They include taking time to find out how the process works, making sure all the information required to make an informed choice about a sale is provided, and making sure providers put promises in writing.They include taking time to find out how the process works, making sure all the information required to make an informed choice about a sale is provided, and making sure providers put promises in writing.