Wed 27 Aug 2008
Interview: Sir Bryan Carsberg
Sir Bryan Carsberg is one of the UK's most respected academics and business experts. His distinguished career has taken in prestigious posts at Manchester University, the LSE, the Office of Fair Trading and OFTEL.The experience of trying to ensure fair and open business practices in these last two positions must have come in handy while compiling the Carsberg Review of Residential Property, a study jointly commissioned by RICS and the National Association of Estate Agents. The report looked at the property transaction process, and how it can be improved to offer the consumer a better, more assured experience.
While the report's findings are mainly aimed at estate agents, there are issues, which will affect housebuilders and developers.
"I tackled the report from the angle that anything which improves the public's confidence in estate agents has got to be a good thing, and the agents I've been dealing with understand that," says Sir Bryan. "They feel they've got a sound profession - or to be more accurate a quasi-profession at the moment - and at the moment it is brought into disrepute by a few bad characters who shouldn't be allowed to operate.
"There's a strange dichotomy in people's views of estate agents. If you ask them what they think in general they tend not to give a glowing report, but if you ask them about the agent they brought their last house through, they'll usually say 'Oh, he was very good', so there's quite a good message there in terms of individual relationships, but it is the few rogues out there who make the headlines and stick in people's minds."
During the consultation period for the report, Sir Bryan wasn't exactly inundated with opinions from housebuilders, but feels that their position has been taken into account: "They didn't feature very much in the regional meetings, which were held like a roadshow where we invited anybody who had an interest, including members of the public, to allow me to 'take the temperature' of how people felt around the country.
We also had meetings about particular themes, and we had people from representative associations for builders, like the HBF for example. I think we got good views through that medium, but they weren't a major voice in these meetings."
The good news for builders already groaning under the ever-increasing weight of legislation and bureaucracy is that the report's recommendation for regulation and the introduction of qualifications for estate agents does not extend to housebuilders, even when they are selling directly to the public.
"I don't think you'd need a qualification for builders and developers who are selling directly, that's really just for agents in general. A lot of the justification for a qualification is the advice you have to give and the legal responsibilities you have as an agent. Would you feel happy, for example, if you were selling a house and you were being advised on what price you should put it on the market at by someone who has no qualification in valuation? Perhaps it's their first day in the office and they've never done anything like that before. That can happen at the moment. It's a matter of giving advice, but with a builder or developer, it's their property so the pricing is their issue - you don't need to safeguard that. While builders do need some legal understanding of their responsibilities, I don't think there's a case for a qualification there.
Much of what Sir Bryan wants to see is based around ensuring potential buyers are well informed, and this is largely an area agents need to work on. "If a builder or developer works through an agent, the agent has the regulatory responsibilities, and there is no need for the builder or developer to have any. Of course some of the things don't apply - one of the things I think an estate agent should tell a prospective buyer who comes into their office is 'You should remember I act for the vendor and not for you'. There is no need for a builder to say that because it's obvious."
One of the Carsberg report's findings which will find widespread approval is the unequivocal call for HIPs to be made voluntary.
"HIPS as we've got them are almost the worst of all imaginable worlds because there is significant cost and very little value. All the things that might have had teeth were taken out of the legislation as it went along. The point is that I don't think people should be made to take out transactions in a particular way. If they are well informed, you should let the market take its course."
If HIPS were to be made voluntary, Sir Bryan says he doesn't think there would be a wide take up in its current form, adding that it should be up to HIPS providers to develop a product, which would sell
"If you can't sell your product in the market, then quite honestly, you ought to take the consequences. If there is a useful product - let's say a non-compulsory HIPS which has been developed in a new way - that could really help you to sell your property quickly and efficiently, there would be some people who'd buy that, but I don't think they should be required to. It comes down to the philosophy that I think there are some areas where the government should have a role - such as in matters connected with global warming - but when it comes to a private transaction between a buyer and a seller, perhaps with the help of an agent, I don't think it's the business of the government to tell people how to do it. They should simply try to make the market work as well as possible, and that's the basis for my view on HIPS.
Sir Bryan's views on legitimate areas for government intervention into the property market bring us to the thorny subject of sustainability and energy efficiency. He can clearly see the need for housebuilders to play their part but isn't convinced that the current demands placed on them are either fair or realistic.
"There clearly isn't a level playing field when it comes to energy efficiency measures for new homes and second hand ones. I have said that this is a legitimate role for the government, but I didn't say that I approved of what they were doing. Again, I think the market should be used to help solve the problem. I don't think the market is perfect in every respect - sometimes it needs intervention, and sometimes it doesn't work very well - but I think you should always try to work through the market. My approach to the sustainability problem would be to increase the price of things that do harm in terms of global warming until people reduced their use of them to an acceptable level."
Sir Bryan also tacitly acknowledges what many housebuilders have been saying for years, that the energy efficiency of a house is along way down the wish list of most house buyers: "The EPC element of HIPS that you get when you buy and sell old houses is pretty useless, I would have thought. I don't think many people take any notice of them. What they do is they buy a house, see what their bills are and adjust their behaviour accordingly."
Housebuilders will be heartened to hear someone so respected in his field acknowledging their plight, but not many will expect the government to do anything other than cock a deaf 'un and plough on with their targets for energy efficiency.
As for estate agents and buyers alike, they can be pleased that the proverbial bad apples will find it extremely hard to operate of Sir Bryan's recommendations are taken up.
Posted by Show House
in Features, National Association of Estate Agents (NAEA), Office of Fair Trading, OFTEL, Royal Institution of Chartered Surveyors, Sir Bryan Carsberg on Wed 27 Aug 2008
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