A Royal Institution of Chartered Surveyors working group has claimed that the UK property industry contains definite transparency gaps with regards to the professional fees charged, and that thorough regulation is required in the real estate sector in the UK. The RICS working group also discovered a number of examples of bad practise as well as inconsistencies in the level of openness regarding the professional fees charged within the industry. The report says that, as a result, customers in the real estate market end up being unaware of what exactly the are paying for when they purchase services.

The RICS has called upon the government to launch a review in order to significantly improve industry regulations, as the report details that consumers in the real estate sector want a clear and detailed breakdown of all professional fees charged, including commission earned, as well as all relevant information necessary in order for them to make fully informed decisions and choices. The President of the RICS and Chairman of their Working Transparency Group, Max Crofts, stated that the group has witnessed a change in the banking world whilst working on the report. He said that the current focus was on ’sensible lending, transparency and proper risk management.’ He went on to say that the consultation had served to highlight the good and bad of how the property market operates, although he claimed that current solutions were ‘piecemeal, at best’.

He concluded that the consultation provided an excellent chance for those in the industry to work together in order to build on existing good practise, as well as to eradicate the more unwelcome practices in the sector to improve regulation and standard and increase customer protection. ‘Greater regulation is needed from government’, he said.

The main recommendations of the consultation point towards the need for landlords, managing and letting agents to be subject to appropriate legislation so that sufficient customer protection and market efficiency and consistency can be ensured.

The RICS also recommended that industry regulation should be undertaken by an independent body that would approve and enforce the agreed standards and codes of industry practise. It stated that this should be backed up with government legislation giving the body sufficient authority to ensure compliance throughout the industry, as well as providing a review of current legislation within the residential sector.

Finally the RICS is convinced that the industry as a whole must ensure that consumer clients are aware of the exact payments made, including remuneration, commission and insurance.

Should proper regulation not be focused on this may greatly impact many home owners and potential home owners alike, possible preventing them for getting the best value possible for a home on their mortgage as well as prevent many first-time buyers from acquiring a good home or even directly affecting re-mortgage value.