Clampdown on estate agents

The Government today called time on rogue estate agents in a bid to prevent housebuyers from being ripped off.

The ombudsmen will be able to compensate the victims of malpractice and refer cowboy agents to the Office of Fair Trading, which has the power to ban them for life.

In spite of the industry's poor track record, the OFT has only banned a handful of agents in the past few years.

The plans, revealed today by Consumer Minister Gerry Sutcliffe, were drawn up with the Office of the Deputy Prime Minister. They will be seen as a snub to the OFT, which in March recommended no action against estate agents following a two-year investigation.

The OFT report was criticised by MPs, the main industry bodies and the Consumers' Association, which campaigned to have it overruled.

Today a Consumers' Association spokeswoman said the move was long overdue. Emma Harrison, a senior campaigner for Which? magazine, said: "This is a big victory for homemovers who will at least be able to get redress when conned by rogue agents. We have been campaigning for this for the past year since our investigators uncovered very widespread and serious misconduct by agents."

An ombudsman scheme for estate agents already exists, but is voluntary and only about a third of agents belong to it. People who fall victim to non-member agents have nowhere to go for redress.

The new proposals also include:

Today Mr Sutcliffe said: "Under our proposals the market will remain competitive, but those rogue agents who flout the law will find themselves out of a job. We will provide protection for consumers and honest estate agents and put the brakes on the rogues."

The Government intends to use the Housing Bill currently before Parliament to introduce the mandatory Ombudsman system.

Suspect practices that persuaded the Government to take action included the case of Judith Barkley's mother, who sold a bungalow she had inherited through Chris Campbell & Co of Bexhill.

She accepted an offer of ?158,000 because she was told the buyer was an elderly lady. It turned out to be a property developer who quickly resold the bungalow for ?187,950.

Stuart Monkcom and his brother David received two offers on his late parents' home, both well below the ?150,000 asking price. Then a prospective buyer called about an offer they knew nothing about.

They suspected the estate agent was colluding with developers. Bradford & Bingley dismissed its local manager and the brothers received an apology and ?500.

Estate agent Dan Melia was filmed by a BBC reporter masquerading as a property developer. Mr Melia offered to undervalue London homes so the "developer" could get them cheap - for a ?1,000 bribe.