Ombudsman quits property sector saying housing market is ‘broken’

Ombudsman Services is to quit the property sector, saying it no longer wants to officiate arbitration services as “a broken solution to a broken market”.

The service has over 8,000 member businesses – not branches – in total, with the overwhelming number being 6,500 RICS firms.

Its withdrawal leaves just two organisations offering redress to the public who have complaints against sales and lettings agents.

But there may be more to the Ombudsman Services departure than meets the eye, with a power play to come – and EYE has asked about exactly that.

For example, it could leave the coast clearer for The Property Ombudsman to become the single housing ombudsman; or be seen as a pre-emptive strike, with the organisation saying it is ceasing what it is “currently doing”.

Or it could be be seen as move by the RICS to become either the single industry regulator, or single ombudsman, with Propertymark known to be pursuing the role of single regulator.

The model of one regulator and one Ombudsman covering both social and private sectors is the one the Government now says it wants and there is to be a consultation.

Last night, a spokesperson for Ombudsman Services confirmed our suspicions that the heavily RICS-backed Ombudsman Services expects to relaunch.

The spokesperson said: “Ombudsman Services will come back into the housing and property market as quickly as we can – once we feel that action is being taken to make the system for redress less confusing and more transparent.

“It’s an urgent priority that this sector is sorted out as it touches every adult in Britain, from home owners to social housing tenants, private renters and buyers.”

Headed by chief ombudsman Lewis Shand Smith, Ombudsman Services says it will start work as soon as possible with consumers, charities, property professionals  and others to help develop a new model for redress in housing “to rebalance power in the sector”.

In a statement, it says it will put its report around the creation of a single housing ombudsman to the Ministry for Housing, Communities and Local Government this spring.

Meanwhile, Ombudsman Services says it will begin a managed withdrawal from the schemes it runs for agents, surveyors and managing agents. It plans to exit altogether by August 6.

The organisation made clear its support for the plans Secretary of State Sajid Javid has outlined for an effective regulator supported by a single ombudsman across the whole housing sector.

Ombudsman Services said it wants to understand from the public about the service they want, and to understand key ‘pain points’ for renters and buyers.

Shand Smith said: “Redress in the housing sector is a really confusing picture for all involved. The patchwork of ADR [alternative dispute resolution] and ombudsman schemes is a mystery to consumers and therefore is incredibly difficult for them to navigate.

“We are ceasing what we’re currently doing in the housing sector in a professional and planned way, because we believe it is not adding value.

“Rather than continue to offer a broken solution to a broken market, we are stepping away to listen to what consumers actually want.

“There are models in other sectors that work far better – for instance the single ombudsman model in financial services and the scheme we operate in energy which handles around 40,000 complaints every year.

“We fully support Sajid Javid regarding the need for a single ombudsman for housing – only then will the housing sector be able to restore trust and ensure that consumers get a much better standard of service.

“Housing is one of the biggest issues we face as a nation, and a fair, balanced, redress system will make sure that it serves the whole of society. We want to work to develop a model that works for everyone.”

More details will be announced next month.

Ombudsman Services: Property is one of three approved redress schemes for the private residential property sector. The oldest is the Property Ombudsman, which is the largest and can trace its roots back to the early nineties, and is the de facto organisation for almost all NAEA and ARLA members.

The third, and newest, is the Property Redress Scheme, launched when the Government said it wanted more choice in the market when it made redress compulsory for letting agents.

It has since done what can only be described as a U-turn and of course the PRS cannot be ruled out as a contender for housing’s single ombudsman.

Ombudsman Services: Property came into being after TPO, and not only provides redress services for the RICS but members of NALS, ARMA and UKALA, as well as some individual firms.

Isobel Thomson, CEO of NALS, said: “In light of the Government’s announcement to consult on a single housing ombudsman providing ease of access for property related consumer complaints, NALS understands the decision Ombudsman Services: Property has taken to withdraw from the current redress set-up and look to the future.

“Ombudsman Services have performed well for NALS firms, providing an excellent service at the most cost-effective rate of membership of any of the existing schemes. We look forward to engaging in discussions with them as they evolve their offering to suit a new consumer protection regime.

Practical arrangements for NALS firms will follow from both Ombudsman Services and NALS.”

Katrine Sporle, ombudsman at TPO, said: “I am sorry to be losing our close working relationship with Ombudsman Services to raise standards in the property industry.

“However, I look forward to continued collaborative thinking with Lewis on the wider issues of the role and purpose of the Ombudsman going forward.”

Property is just one area for which Ombudsman Services provides redress. The others are communications and energy.

Commentators say that an entirely new body could become the single housing ombudsman. Established bodies that could be front-runners include the TPO.

In social housing, there is the Housing Ombudsman Scheme, and the Local Government and Social Care Ombudsman, both of which can consider complaints from local authority tenants, plus the Regulator for Social Housing.

x

Email the story to a friend

11 Comments

  1. praediumagens79

    This is a strong and astute move on the part of OS:P in recognition of the implied inevitable realignment of the ombudsman provision in the property sector. OS:P are an organisation of vast resources in dispute resolution in many different sectors, and will be well placed to pitch in again if a tender situation prevails. Having one ombudsman scheme for the whole property sector can only be a good thing for consumers who, at the moment, have to play ‘hunt the ombudsman scheme’ if they wish to complain about their agent. I hope the new membership departments of the other schemes are resourced up in the meantime to manage the defections of those who decide to jump ship!

    Report
    1. Ombudsmans61percent

      OS:P are a disaster for consumers. Martin Lewis’ Sharper Teeth: The Consumers Need For Ombudsman Reform shows that 80%+ of property complainants thought the Property Ombudsman’s decision was, “unfair.”
      In 2010 they handed out an average of £1511.75p to complainants. Today it stands at 50 quid. They have yet to produce an Annual Report for the whole of 2017. A shambles where its Chair blames complainants for complaining.
      The consumer is better off going to TPOS.

      Report
  2. Chris Wood

    Key to any new over-arching regulator will be the ability to effectively police the industry for consumers and agents, rather than the current ‘pass the parcel’ “not my job” system we have at present.

    Report
  3. DHS75

    I can see an awful lot more regulation and red tape on the horizon, especially if the RICS are involved.

    Report
  4. IWONDER36

    Never any complaints about our redress scheme, but then we don’t give tenants a reason to use it. It seems to me that the constant meddling in the industry is heading one way!

    The veil maybe to make it appear that rogue agents and Landlords are the target but it seems more likely that there is an attempt to get rid of the small independents, leaving only the few to mop up the cream.

    Soon, consumers will be left with little choice of which agent to use, as they have with the banks.

    Rents will rise and price fixing may by another name may creep in!

    Ironic that the large chains that will be the ones left appear to have some among them who were charging the tenants extortionate fees in the first place!

    It seems that successive governments won’t be happy until towns are so generically the same that it won’t make a jot of difference which one you’re visiting.

    Start helping small business thrive instead of attacking them from all sides, including saving our pubs, local shops and agents, who all bring something of the traditional to our towns and cities.

    Report
    1. AgentV

      IWONDER36

      It would be great to talk to you about this. We have ideas to help. Can you contact me on in@agentv.co.uk

      Report
  5. GeorgeHammond78

    Whether its a Power Play or not – that’s 8000 businesses who get let down at a whim. Whose going to cover their costs of admin plus aggro? Pathetic!

    Report
  6. Mark Walker

    Apropos of nothing, but Ombudsman Services issued last year’s annual membership invoice in April 2017.  This year?  January, just before this news broke.

    Report
  7. AgencyInsider

    If this turns into a RICS v Propertymark battle for supremacy in the role of Regulator then RICS will undoubtedly win. They hold a Royal Charter and they are far closer to government than Warwick.

    Gawd ‘elp us.

    Report
    1. praediumagens79

      You reckon? How many estate agents does RICS represent …. ? They appear to have have quietly withdrawn from this sector in recent years.

      Don’t believe me? Try going to the RICS website and typing ‘estate agents’ into their search box, and see what comes up.

      Report
  8. Ombudsmans61percent

    To the Leader of the House of Commons and to the Secretary of State For Housing, Communities and Local Government:
    Ombudsman Services Case 510458: Part 4 – The Full English Cover-Up (1)

    1) Why Are Ombudsman Services’ Solutions “Broken” And Why Is The Market, “Broken?”

    Dear Mrs Leadsom and Mr Javid,    

    Once again we’re being told that the housing market is, “broken.” 

    This tells us virtually nothing about who is breaking the market, why they’re breaking the market and why they’re able to get away with breaking the market. 

    The term, “broken” has no explanatory value. It is itself, “broken.” It’s time to look at the evidence and where the evidence is missing know why it’s missing..

     “Ombudsman quits property sector saying housing market is, “broken.”

    (Property Industry Eye. Feb 6, 2018 Rosalind Renshaw)

    Ombudsman Services is to quit the property sector, saying it no longer wants to officiate arbitration services as “a broken solution to a broken market”.

    Q. Mrs Leadsom and Mr Javid, is it not now long overdue for The Rev Shand Smith to explain to the 80%+ property complainants why he offers them a broken solution to their problems?

    The service has over 8,000 member businesses – not branches – in total, with the overwhelming number being 6,500 RICS firms.

    Its withdrawal leaves just two organisations offering redress to the public who have complaints against sales and lettings agents.

    And, we would add, RICS “regulated” surveyors.

    But there may be more to the Ombudsman Services departure than meets the eye, with a power play to come – and EYE has asked about exactly that.

    For example, it could leave the coast clearer for The Property Ombudsman to become the single housing ombudsman; or be seen as a pre-emptive strike, with the organisation saying it is ceasing what it is “currently doing”.

    Q. Mrs Leadsom and Mr Javid, what it is currently doing is leaving 80%+ of its property complainants – “dissatisfied.” Why wasn’t there a pre-emptive strike by the government monitors of this government approved scheme when DJS Research discovered that the, “dissatisfaction” rate was 61%?

    Or it could be seen as move by the RICS to become either the single industry regulator, or single ombudsman, with Propertymark known to be pursuing the role of single regulator.

    Q. Mrs Leadsom and Mr Javid, your government has spoken of evidence-based policy. The existing evidence shows that;  

    a) The RICS refuse to enforce their own Rules and Regulations, 

    b) Have encouraged the development of practices that do not work in the customer’s interest, 

    c) Have politically influenced and engaged civil servants 

    and

    d) Closely monitor OS:Property for the, “effective resolution of disputes.” 

    Is an 80%+ consumer dissatisfaction rate an, “effective resolution of a  dispute”  and should such an organisation be given a monopoly role as single regulator?

    The model of one regulator and one Ombudsman covering both social and private sectors is the one the Government now says it wants and there is to be a consultation. 

    Last night, a spokesperson for Ombudsman Services confirmed our suspicions that the heavily RICS-backed Ombudsman Services expects to relaunch.

    Q. Mrs Leadsom and Mr Javid, why doesn’t the RICS regulate it Members and (Un)Regulated Firms in the first place then there would be no need for its, “appointed” company, OS:Property?

    The spokesperson said: “Ombudsman Services will come back into the housing and property market as quickly as we can – once we feel that action is being taken to make the system for redress less confusing and more transparent.

    Q. Mrs Leadsom and Mr javid, this is ludicrous. This appalling organisation is blaming everyone else for its 80%+ complainant dissatisfaction rate. Where is the “transparency” they speak of when they’ve even failed to release an Annual Report for 2017?

    Q. Mrs Leadsom and Mr Javid, why are Ombudsman Services leaving the ADR market to then come back into it as sole provider when they have a scandalous 80%+ consumer dissatisfaction rate?

    “It’s an urgent priority that this sector is sorted out as it touches every adult in Britain, from home owners to social housing tenants, private renters and buyers.”

    Q Mrs Leadsom and Mr javid, surely it is an even more urgent priority that the RICS and its appointed company Ombudsman Services:Property are sorted out and explain why they can’t regulate their own members and why they believe that an 80%+ complainant dissatisfaction rate is, “effective?”

    Headed by chief ombudsman Lewis Shand Smith, Ombudsman Services says it will start work as soon as possible with consumers, charities, property professionals  and others to help develop a new model for redress in housing “to rebalance power in the sector”

    Q. Mrs Leadsom and Mr javid, why has the Rev Shand Smith completely forgotten the conference organised by Chris Gill and Naomi Creutzfeldt which criticised ombudsman schemes such as his for their poor decisions and lack of transparency and accountability?

    Q. Mrs Leadsom and Mr Javid, why did the Rev Shand Smith refuse to sit in the same room as the ombudsman watchers and debate the issues?

    Q. Mrs Leadsom and Mr Javid, The Rev Shand Smith has said that his current model is, “superb” and yet gives an 80%+ complainant dissatisfaction rate as a solution to the redress it offers. Wouldn’t power in the sector be re-balanced if both he and the RICS were removed from it?

    In a statement, it says it will put its report around the creation of a single housing ombudsman to the Ministry for Housing, Communities and Local Government this spring.

    Meanwhile, Ombudsman Services says it will begin a managed withdrawal from the schemes it runs for agents, surveyors and managing agents. It plans to exit altogether by August 6.

    The organisation made clear its support for the plans Secretary of State Sajid Javid has outlined for an effective regulator supported by a single ombudsman across the whole housing sector.

    Q. Mrs Leadsom and Mr Javid, we sent hundreds of emails to you, Sajid Javid when you were Business Secretary asking why the RICS couldn’t regulate its own Members and (Un)Regulated Firms but didn’t get a reply. Is that because a politically influenced and engaged civil servant had intercepted our correspondence or that evidence based policy was too radical for you when you were the Business Secretary?

    Ombudsman Services said it wants to understand from the public about the service they want, and to understand key ‘pain points’ for renters and buyers.

    Q. Mrs Leadsom and Mr Javid, surely the public want a fair, independent, accountable and transparent system of redress – something that doesn’t exist at the present time at RICS run Ombudsman Services:Property?

    Shand Smith said: “Redress in the housing sector is a really confusing picture for all involved. The patchwork of ADR [alternative dispute resolution] and ombudsman schemes is a mystery to consumers and therefore is incredibly difficult for them to navigate.

    Q. Mrs Leadsom and Mr Javid, non of the above explains why a dissatisfaction rate of 80%+ of property complainants is acceptable. Isn’t the real mystery the one where The Rev Shand Smith and his organisation have been able to get away with it for so long?

    “We are ceasing what we’re currently doing in the housing sector in a professional and planned way, because we believe it is not adding value.

        Q. Mrs Leadsom and Mr Javid, When The Rev Shand Smith occasionally
        hands a property complainant a£50 so-called, “financial award” doesn’t
        add real value to his fee-paying Members’ business practices and isn’t
        that what is sector is all about – providing its Members with a platinum
        get-out-of-jail free card?

    “Rather than continue to offer a broken solution to a broken market, we are stepping away to listen to what consumers actually want

    Q. Mrs Leadsom and Mr Javid, DJS Research attempted to alert The Rev Shand Smith to the fact that his  superb solution was broken but clearly he didn’t listen. Why, because if he had listened to their recommendations then his solutions would have ceased being broken and The Rev Shand Smith would have no need to professionally leave the sector as he puts it?

     Like the bosses at Carillion, this would appear to be a man also in total denial – someone who avoids looking at the evidence and who terminated DJS Research’s contract when the data they produced became too unpalatable for him..

    There are models in other sectors that work far better – for instance the single ombudsman model in financial services and the scheme we operate in energy which handles around 40,000 complaints every year.

    “We fully support Sajid Javid regarding the need for a single ombudsman for housing – only then will the housing sector be able to restore trust and ensure that consumers get a much better standard of service.

         Q. Mrs Leadsom and Mr Javid, this is drivel why is The Rev Shand 
         Smith blaming the rest of the housing sector for his company’s 80%+
         complainant dissatisfaction rate?

     Q. Mrs Leadsom and Mr Javed, what trust can consumers have in a service that results in an 80%+ complainant dissatisfaction rate?

    “Housing is one of the biggest issues we face as a nation, and a fair, balanced, redress system will make sure that it serves the whole of society. We want to work to develop a model that works for everyone.”

    Q. Mrs Leadsom and Mr Javid, The Rev Shand Smith’s superb model worked really well for his fee-paying members as 80%+ would testify – why isn’t it working for complainants?

    Q. Mrs Leadsom and Mr Javid, doesn’t the power in The Rev Shand Smith’s sector lie with RICS the regulator who doesn’t regulate and with their Members who refuse to be regulated and doesn’t it need to be rebalanced in favour of the complainant?

    More details will be announced next month.

    Ombudsman Services: Property is one of three approved redress schemes for the private residential property sector. The oldest is the Property Ombudsman, which is the largest and can trace its roots back to the early nineties, and is the de facto organisation for almost all NAEA and ARLA members.

    The third, and newest, is the Property Redress Scheme, launched when the Government said it wanted more choice in the market when it made redress compulsory for letting agents.

    It has since done what can only be described as a U-turn and of course the PRS cannot be ruled out as a contender for housing’s single ombudsman.

    Ombudsman Services: Property came into being after TPO, and not only provides redress services for the RICS but members of NALS, ARMA and UKALA, as well as some individual firms.

    Isobel Thomson, CEO of NALS, said: “In light of the Government’s announcement to consult on a single housing ombudsman providing ease of access for property related consumer complaints, NALS understands the decision Ombudsman Services: Property has taken to withdraw from the current redress set-up and look to the future.

    “Ombudsman Services have performed well for NALS firms, providing an excellent service at the most cost-effective rate of membership of any of the existing schemes. We look forward to engaging in discussions with them as they evolve their offering to suit a new consumer protection regime.

    Q. Mrs Leadsom and Mr Javid, an 80%+ property complainant dissatisfaction rate would suggest that redress is overwhelmingly stacked in favour of the firms that consumers are complaining about. It’s a rigged market isn’t it – otherwise wouldn’t things would be very different but they aren’t?

    “Practical arrangements for NALS firms will follow from both Ombudsman Services and NALS.”

    Katrine Sporle, ombudsman at TPO, said: “I am sorry to be losing our close working relationship with Ombudsman Services to raise standards in the property industry.

    Q. Mrs Leadsom and Mr Javid, Ombudsman Services have spectacularly failed to raise the standards of their fee-paying Members. They can’t even get them to keep an up-to-date Case File. Isn’t this totally inept?

    “However, I look forward to continued collaborative thinking with Lewis on the wider issues of the role and purpose of the Ombudsman going forward.

    Property is just one area for which Ombudsman Services provides redress. The others are communications and energy.

    Commentators say that an entirely new body could become the single housing ombudsman. Established bodies that could be front-runners include the TPO.

    In social housing, there is the Housing Ombudsman Scheme, and the Local Government and Social Care Ombudsman, both of which can consider complaints from local authority tenants, plus the Regulator for Social Housing.

    Q. Mrs Leadsom and Mr Javid, why hasn’t Ombudsman Services produced an Annual Report for 2017 where is the transparency and accountability that The Rev Shand Smith talks about and how do you think they will account for an 80%+ complainant dissatisfaction rate with their rigged solutions?

        If you are genuinely concerned about consumer protection and wish to
        rebalance power in the housing sector why not critically examine the
        evidence, consult with DJS Research and give each and every one of the
        80%+ dissatisfied customers of The Rev Shand Smith’s less than superb
        model of redress the opportunity to explain why they are so very
        dissatisfied with his, “solutions?”

    Yours sincerely,

    Steve Gilbert – Workstock Number – 510458.

    The Ombudsmans61percent Campaign is at http://www.blogger.com and http://www.facebok.com Ombudsmans Sixtyone-Percent

     

    Report
X

You must be logged in to report this comment!

Leave a Reply

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.