Estate agents better liked, no reform needed -OFT

A year-long OFT study into the housing market concluded that a lack of competition for traditional estate agents was an issue, but said existing measures to govern their activities were sufficient.

However, it advised customers to shop around and haggle over agents' fees, estimating that a failure to do so could be costing house sellers up to 570 million pounds a year.

A body which represents estate agents said the OFT report was disappointing and that tighter rules were needed to protect customers.

The OFT study said the law should be changed to make it easier for other providers to enter the housing market, in particular through online services.

This would have a "dramatic" impact on the cost of buying or selling a home, it said. But there should only be regulation where it was necessary to protect consumers.

"In the present economic climate, it is more important than ever that people get a good deal when buying or selling a home," said John Fingleton, the OFT's chief executive.

"Encouraging new business models, online estate agents and private seller platforms could put useful competitive pressure on traditional models and lead to better value for buyers and sellers."

It rejected tighter controls of estate agents, saying overall satisfaction with them had risen in recent years. A recent OFT survey found 88 percent of buyers and sellers were happy with agents, up from just over 70 percent in 2004.

While a third of those who used traditional estate agents thought the fees they paid represented poor value for money, 64 percent did not negotiate a lower commission rate.