The Office of Fair Trading (OFT) has confirmed they will be launching a new study into the quick house sales market.
The research is aimed at individuals who have used or considered using quick sale firms and the OFT has already contacted over 50 companies as part of their new study, who have been asked to provide information regarding their business models and practices.
The OFT has a number of concerns:
- Unclear fee structures, for example charging unexpected fees after an initial valuation
- Cutting the proposed purchase price very near to completion
- Companies making false claims about the value of a sellers home
- Companies falsely claiming to be a cash buyer
- Requiring sellers to enter into unfair agreements preventing them from selling to other potential buyers
So called quick house sale companies offer to purchases houses, usually quickly, but at a substantially discounted rate to the actual market value of the property.
Whilst the OFT recognise that some quick house sale companies may offer a useful service, there is clearly concern that vendors could be selling their house for substantially less than the market value.
The OFT is particularly concerned about separated couples, financially strapped families and the elderly; as these groups could look to sell quickly to either resolve financial issues or pay for care.
To aid with the research, the OFT is interested in hearing from people with experience of this sector, including valuation experts, estate agents, debt advisors and home owners. If you have had any experience, good or bad, of quick house sale companies, the OFT are urging you to contact them via email on firstname.lastname@example.org.
Cavendish Elithorn, OFT Senior Director for Goods and Consumer, said: “Businesses offering quick house sales may provide a useful service for homeowners who need to unlock cash in a hurry. However, they are often used by consumers in vulnerable situations and therefore we are concerned about the risk of consumers being misled and losing out on large sums of money.”
Elithorn continued: “We want to hear from anyone who has used a quick house sale provider, whether they have had a good or bad experience with the business. We will protect the confidence of anyone who contacts us and their information will be invaluable in helping us to build up a picture of the market and establish whether we need to take action.”
The Financial Conduct Authority (FCA) has also welcomed this research, Christopher Woolard, Director of Policy, Risk and Research at the FCA said: “We welcome the OFT’s market study. Consumers facing repossession of their home are in a very vulnerable position and it is important that they are not pressured into making poor decisions.”
Woolard continued: “This market study is an important piece of work that will explore current practices in the market and, where necessary, make recommendations to improve outcomes for these vulnerable consumers. We will continue to work with the OFT and others to address any concerns in this market.’