My fight for a level playing field

The Negotiator: Tell us about your credentials for taking up the property ombudsman role.

Christopher Hamer: My career prior to taking up the role included many years in ombudsman schemes. After being the private secretary to the Parliamentary Commissioner, I held roles as the director of the Insurance Ombudsman Bureau - the first of the private sector Ombudsman schemes - and the general manager at the Personal Investment Authority Ombudsman Bureau. Immediately before taking up what was then the Ombudsman for Estate Agents post, I was head of compliance for HSBC Insurance worldwide, so I was also used to working within a regulated environment.

N: What challenges did you expect to face in the role and did these differ from those you found after starting?

CH: I felt there were opportunities to broaden and increase the ombudsman scheme’s profile. However, I also expected that the workload might grow as Home Information Packs were on the horizon, the Consumers, Estate Agents Redress Act was being developed and I could see that there was room for some sort of dispute resolution in the lettings sector.

I could see a route to follow, although I knew that the legislation might not necessarily mean a smooth path. For instance, HIPs did not prove to be the right vehicle to provide up front information to buyers about properties and fairly early on it became clear that CEARA had not considered applying a consistent obligation for the lettings industry to sign up to an approved redress scheme. Given the current market conditions and the frequent stories about unscrupulous letting agents appearing in the media, it is not an overstatement to label this a glaring omission.

Regarding estate agents, like many people who have bought or sold a house, I could have come up with a number of uncomplimentary stories. However, after I became Ombudsman, I became increasingly impressed by the degree of professionalism that actually existed and has increased over time within the industry. Naturally, this is not an aspect which the media outside the industry tends to focus on.

N: What are the main industry changes which have affected the TPO over the last five years?

CH: HIPs were introduced and then disappeared, although we still have the Property Information Questionnaire and Energy Performance Certificates, which give buyers some information about the property. CEARA brought many more members into the scheme, but in truth the biggest change has been brought about by the economic climate with sales transactions now almost less than half those in 2006.

As a result, some agents have disappeared, some have consolidated and many have moved into lettings. That is fine if they are in lettings for the long haul because they will be concerned with applying proper standards and treating landlords and tenants with appropriate fairness. However, I get the feeling that some firms simply consider lettings as an easy way to make money without providing consumers with consistent standards and potentially, of course, could put client money at risk. These are firms which are invariably outside TPO membership and have no affiliation to the Association of Residential Lettings Agents.

N: How has your workload grown during your tenure?

CH: When I joined in December 2006 there were 19 members of staff and around 500 cases that year of which all but 99 were sales cases. The scheme had 2,708 members with 7,666 offices and was occupying Beckett House in Salisbury, a building with ‘character’ - the popular press would say this was estate agent speak for a rabbit warren of separate rooms.

The scheme now boasts 8,229 members with 13,975 offices and I expect to receive around 1,400 new cases this year with 65% of those being lettings. My jurisdiction has also broadened to include residential leasehold management, commercial and international property, as well as chattels auctions. We are also working with a view to using our dispute resolution experience to provide an ombudsman service to the glazing industry. With this increase in workload staff levels have risen proportionately, which necessitated us moving to larger, less confined, offices this year.

N: How has the level of your awards changed over the years?

CH: In my first full year awards for sales cases averaged £547 with a 65% support rate in favour of complainants, now the award average is £258 and that support rate has reduced to 50%. This is not a sign of a softer approach by me but an indication that the issues brought before me are less justified which shows that, whilst mistakes occur, agents are following the required standards of the Code of Practice more closely.

Unfortunately, this is not the same story on the lettings side where the support rate is around 65% and the average award level is increasing. Whilst we estimate that 60% of letting agents in the UK have registered with us, some of them have yet to fully understand their obligations to their landlords and tenants and to act in accordance with the Code of Practice. However, over time, I expect to see that same cycle of improvement as we have seen with sales.

N: The government has made no bones about stating it is against introducing more regulation in the agency market. On which areas of agency would you focus if you had such powers?

CH: Ombudsmen are about redress not regulation, although certainly for lettings I think a form of regulation is needed as 40% of the industry are not members of a redress scheme or affiliated to a trade association. Those firms are applying their own individual standards and may possibly be undercutting other more conscientious firms as a result. Regulation would set a level playing field for all letting agents and would benefit their clients. It would also benefit TPO members who provide a consistent level of service to their clients in accordance with the Code of Practice, as they are used working within a framework. A realistic level of regulation should not present any difficulty to either implement or abide by.

Sales agents already, of course, operate under the TPO Code of Practice, the Estate Agents Act and the Property Misdescriptions Act, although I am concerned about the potential for repeal of the latter Act to the rather broader Consumer Protection Regulations and the general expectation of disclosing anything that could be described as material information. The question is, in whose opinion is it material?

N: What do you see the future holding for TPO and the property industry in general?

CH: Clearly the property industry has some difficult times ahead in terms of the sales market. I also think that on the lettings side, without some form of regulation, there will continue to be examples highlighted by the media of unscrupulous agents mistreating consumers and mishandling client money and harassing consumers. The industry will therefore have to weather a storm unless it can now guard against those sorts of events happening. The SAFE agent scheme is a step in that direction.

N: Tell usabout a memorable moment during your tenure.

CH: There was my first radio interview on Five Live, which I prepared diligently for because I didn’t want to scare the horses - either the consumers or the agents - when I hadn’t even properly taken up the job. That was nerve racking, but not as nerve racking as my neighbour telephoning me later that day to inform me that the police had arrived at my house and were threatening to break down the door! It turned out they had the wrong address!

I also remember suddenly realising at 3am after a Negotiator Awards ceremony in London that I was due at Radio Oxford at 10am and then desperately trying to carry out the subsequent interview without trying to let the effect of the previous evening’s indulgences become apparent.

N: What are you plans for the next five years?

CH: To continue to feedback to the industry on the complaint issues regularly presented to me so that the particular aspect of my role of contributing towards raising standards in the industry is fulfilled. I hope also we can continue to grow the scheme, perhaps using our 20 years of collective experience in dispute resolution to broaden jurisdiction into further areas within the property sector.

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