The house valuations lottery

ESTATE agents are turning the whole process of selling property into a lottery by offering wildly different valuations on homes, according to a new survey.

Some agents are apparently deliberately overvaluing houses to grab the business. Others are unable to come up with a fair price, either because of a lack of training or through incompetence. Some rogues may even be undervaluing in order to sell on properties to others in return for a bribe.

The survey, by the campaigning consumer group Which?, looked at valuations offered by agents on 14 homes in various parts of the country. It found differences of more than 25% on six of the properties. An inaccurate valuation can mean a seller either loses tens of thousands of pounds or finds the home has no takers.

The most dramatic difference involved a house in Tyne & Wear valued by Halifax at £200,000 and by Moody & Co at £325,000 - 63% higher. Bradford & Bingley thought a house in Liverpool was worth £125,000. Halifax said it was worth 44% more at £180,000.

Which? is calling on the Government to honour a promise made last summer for regulations requiring all estate agents to belong to an industry body with a policing system before they can trade. There were also plans to give the Office of Fair Trading and councils powers to mount spot-check raids on agents. Neither proposal has been enacted.

According to property expert Phil Spencer, who was questioned by Which?, 'touting' for business - deliberately overvaluing - is a common problem. He was stunned by the scale of the variations.

'That's quite scary,' said Spencer, who presents Channel 4's Location, Location, Location. 'Not all high valuations are wrong but in some cases it can mean either the agent does not know the area they are working in or they are touting for business.'

Which? complained that anyone can set up as an agent and no one actively checks to see if the profession is sticking to the rules. It warned: 'A home is the biggest purchase we make - but the whole process is clouded in secrecy with estate agents holding all the cards.

'We can't know whether an agent is lying to us and buyers and sellers can be left thousands of pounds out of pocket. Better enforcement and minimum standards will help, but if things go wrong we need access to a proper independent redress mechanism.'

Undervaluing is also a problem, according to the report. One consumer had two agents value his home in Exmouth, Devon, at less than £250,000. A third, Bradleys, recommended £325,000 - and eventually sold the home for £320,000.

Which? is critical of the Ombudsman for Estate Agents, saying the watchdog should monitor the industry more effectively and punish those who tout for business or deliberately undervalue.

Malcolm Coles, Editor of Which? magazine, said: 'The current consumer protection system is hopelessly ineffective and allows rogue estate agents to get away with daylight robbery. For two years Which? has been demanding that all estate agents are members of an independent redress scheme. This new Government must put legislation in place to protect consumers when making what is often the biggest purchase of their lives.'

Which? said the system in Scotland is dominated by solicitors who, as well as providing conveyancing, can act as estate agents and arrange a mortgage and survey for buyers. A survey by Which? in January found around 90% of homebuyers in Scotland thought the service they received from their solicitors was either very good or fairly good.

Scottish home buying works on a bidding system. Once the best offer is accepted, both buyer and seller are legally obliged to complete the sale.

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