A new report released by Britain’s Office of Fair Trading has stated that house buyers and sellers are in desperate need of an alternative to the traditional estate agent market model in order that they receive overall better value. The report goes on to say that actual price competition between estate agents is not especially strong, and that rises in agent fees and commission rates typically happens during property boom whilst it tends to drop again when the market contracts.

The year-long study by the OFT also showed that the internet has also revolutionised how people look for new homes, but they also found that Internet portals also remained dominated by the traditional estate agents. The OFT went on to suggest that innovation in respect of Internet services could have a huge impact on just how much it costs to buy and sell a home to the benefit of both buyer and seller. The report further stated that current legislation should be brought up to date in order that alternatives to the traditional estate agent models could be better fitted into the market so that the market in general is as malleable as it can be to new models.

The report also exhorts policy-makers to investigate methods of coming down on possible conflicts of interest in the property-buying market – especially with regard to payments for such related services as conveyanving and mortgage advice and weighs in heavily to criticise the introduction fees that estate agents pay to other companies for introducing business to them. The OFT’s report has suggested that such fee could even be banned. It does not, however, press the case for extra regulating, stating that existing laws that date back to 1979 work perfectly well. They also argued that a licensing system was unnecessary.

John Fingleton, the OFT’s chief executive, stated that the encouragement of new ways of doing business within the sector such as online estate agents and private vendor platforms could well result in positive pressure being applied to traditional models and ways of buying and selling houses, helping those seeking homes to lock in the best mortgage rates possible, and might end in improved value for both buyers and sellers – particularly for first-time buyers and those seeking valued re-mortgages.