Business minister Fallon announced that there would be extra support and less bureaucracy for a variety of ‘challenger’ businesses.
Specifically singled out was the forthcoming amendment of the Estate Agents Act “to take out of its scope intermediaries such as private sale portals, which only advertise properties and provide a means for sellers and buyers to communicate with each other”.
Such ‘challengers’ to estate agents were among businesses described by Fallon – speaking at an entrepreneur event in Sheffield – in glowing terms.
He said: “These are innovative enterprises that do not follow established ways of business working, and which might be held back by burdensome bureaucracy.”
He went on: “Challenger businesses create wealth and jobs – we should champion them at every opportunity. They put new products on our shelves, innovate our service industry and create new markets using the latest technology.
“I don’t want these pioneers falling foul of outdated regulations.”
‘Challenger’ businesses will be able to access 22,000 business mentors, who form part of the Government’s £1.8m mentoring programme.
The new business models, particularly if they are run by women, will also have access to a £100,000 fund to help them find the ‘right mentor to help their business prosper’.
Fallon’s remarks are likely to infuriate those in the industry who are unhappy about how they, as traditional estate agents, will still have to toe the legal line while newcomers – which could include new models from the likes of Tesco, which launched mortgages this summer and has previously had a stab at estate agency – will not.
Yesterday on EAT, Property Ombudsman Christopher Hamer hit out at the speed with which the Government is pushing through its changes to the Estate Agents Act.
Among the many agents who have contacted EAT to express their views is Jonathan Hudson, of West End estate agent Hudsons Properties in London.
He said: “To allow non-industry experts to come into the market unregulated is potentially catastrophic.
“Why should agents who have abided by the rules all of a sudden be undermined by newcomers, whether they are a large institution like Tesco starting an estate agency arm, or sellers directly selling to one another?
“Professionalism should never be under-estimated. When you are dealing with something as significant as property, you should be protected as a consumer – or what is the point in the legislation in the first place?”
Hudson also warned of the potential for mis-selling properties, with buyers incurring unnecessary expense in mortgage arrangement and survey fees, before errors are picked up by their conveyancers.
The Residential Property Surveyors Association also expressed its serious concerns.
Chairman Alan Milstein said: “The Government’s decision to make businesses promoting private house sales exempt from the EAA could see thousands of home buyers committing to purchase properties without any statutory protection.
“This could lead to considerable confusion among home buyers, with many entering into a purchase, unaware that if any problems should arise, they will not be eligible for any form of redress.
“With the recent changes in mind, it has never been more important for home buyers to commission their own independent condition survey on any property they plan to purchase.
“If purchasing a property from a private seller, the intermediary that has been promoting the property will be under no legal obligation to ensure that the property details and specifics provided to the buyer are accurate.
“In effect, people could be led to believe a property is in good condition, only to find once they have purchased and moved into the property that in fact considerable works are required – a costly mistake, which could run into thousands.”