The UK’s property market is, generally speaking, quite a unique consideration.
The often-vaunted love affair Britons have with investing in bricks and mortar affects not only the decision-making of major developers and lenders, but also the long-term financial planning of consumers across the country – it is a subject that has risen to the surface during the extraordinary boom in house-buying activity during the pandemic.
In fact, even the data struggles to communicate how remarkable the past 18 months have been in this sector. The latest figures released by the ONS indicate a year-on-year house price increase to March 2021 of 9.9%, while rental prices grew 1.3% nationally in the same period.
While pandemic-related interventions by the government, not least the Stamp Duty Land Tax holiday, have played a significant role, these figures demonstrate that even in the most uncertain and constantly evolving circumstances, Britons will flock to property as a perceived ‘safe haven’ asset.
This enduring appeal does, however, raise some interesting questions for the real estate sector. Namely, the standards and quality of service that customers – buyers, sellers, renters, landlords – receive when working with agents, brokers and lenders.
In July 2019, the Regulation of Property Agents (RoPA) working group, was commissioned to conduct a report into the often-tense relationship between licensing among real estate professionals, with a view to where regulation might be most appropriately imposed.
This is controversial for a number of reasons; chiefly, that the growth of the sector might be hindered by compulsory accreditation.
With the COVID-incited property boom anticipated to plateau as the stamp duty holiday tapers in the months to come, now is an opportune moment to reflect on this debate.
We must consider why professionals across the property sector may consider voluntary regulation, and where different accreditations and qualifications may be of benefit to the industry as a whole.
Credibility for the industry as a whole
The property industry is well-stocked with organisational bodies of varying prestige, many offering accreditation schemes and qualifications.
To name just a few of the more reputable; the Institute of Residential Property Management (IRPM), the Royal Institution of Chartered Surveyors (RICS), and the assessment of professional competence (APC) each offer differing schemes aimed at establishing professional standards and raising the level of skill and competency for those involved.
The larger question looming over the industry is this – which, if any, should be made compulsory?
Most of the laws which guide the conduct of property agents are enforced by Trading Standards team, such as the Tenant Fees Act 2019, Estate Agents Act 1979, and the Client Money Protection Requirements Regulations 2019.
Of course, as the existing accreditation schemes are voluntary, they fall outside of the remit of regulation – meaning legislation is the only instrument through which higher professional standards can be enforced.
This is the most convincing argument for regulation. Take, for example, a survey conducted by the market research company Ipsos Mori which found that only three in ten UK adults “trusted” the honesty of property agents – less than half the number admitting to trusting the “average person on the street”.
For a profession that serves as a necessary conduit between buyers, sellers, landlords, and tenants, it is essential that the integrity of service providers in the real estate sector is upheld.
Some will argue that checks and balances are already in place within the industry; through bodies such as The Property Ombudsman, and the Property Redress Scheme, in addition to the aforementioned laws enforced by Trading Standards. For lenders, of course, the Financial Conduct Authority (FCA) governs much of what they do.
However, it must be noted that each of these organisations are generally in place to react to complaints about conduct and poor standards; where enforcing accreditation bodies across the industry would be a proactive step to reduce poor service.
Professional development
Establishing industry-wide frameworks of qualification and accreditation would not only benefit clients and the sector as a whole – it has significant merits to the individual real estate professional.
Poor and declining levels of trust in property agents affords an opportunity for those who can demonstrate, through independent accreditation, their reliability, experience, and credibility.
When paired with the hypercompetitive and saturated state of the UK property market, demonstrating standards could be critical in gaining a lucrative competitive edge.
Professionals or businesses that look to undertake a course of study may consider associating with MRICS or FRICS (Member or Fellow of the Royal Institution of Chartered Surveyors), which in addition to accrediting development courses also establish their own frameworks of professional standards and enforce compliance on its associates.
This can include monitoring their ongoing professional development and maintaining professional liability insurance.
It is worth noting that these qualifications should not be perceived as mere window dressing to entice customers – they hold genuine value for professionals, particularly those looking to advance in their careers.
At the University of Manchester’s Real Estate MSc we engage directly with those working in the industry to ensure a constantly relevant depiction of the practicalities of the sector as it evolves and responds to market forces.
For me, this direct contact has only expounded my view that qualifications serve to both raise professional standards, while preparing professionals to respond to rapid shifts in demand and aggregate client behaviour – demonstrated as a valuable skill in the unprecedented volatility of the pandemic.
The relative merits and shortcomings of more stringent regulation will, inevitably, be debated at some volume over the coming months. In my view, regardless of how, if at all, regulation is implemented on real estate professionals, the rewards inherent to gaining qualifications speak for themselves.
The UK property market has shown through the pandemic its inelasticity to even the most tremendous of economic shocks. However, while the public’s love affair with property seems to prove enduring, the reputation of service providers in this space must be addressed.
Raising professional standards across the board is a certain path to restoring trust in the profession in the long term – while failing to do so could see the sector cut out altogether.
