While it would be foolish to suggest that the Covid-19 pandemic had such a noticeable or vastly beneficial impact that it could be called a ‘silver lining’, it should be noted that this period saw an exceptional increase in activity in the real estate market.
The numbers are striking, even for the particularly bullish UK property sector. Figures released by the ONS suggest house prices through March 2021 rose 9.9%, while rental prices rose 1.3%. Of course, this has been supported to some extent by state intervention – the holiday of the property tax on stamp duty has triggered a wave of home purchases over the past 12 months, which is expected to continue. continue throughout its downturn throughout the summer.
Faced with what can credibly be called a boom in the real estate market, it is natural that the role of real estate professionals, as well as the quality and consistency of the service offered to clients, should be honored. . In particular, it is worth examining the current industry accreditation system and its role in improving overall skills and raising standards.
In July 2019, the Real Estate Agent Regulation Task Force (RoPA), an advisory body tasked with suggesting a regulatory framework for upholding professional standards in the real estate industry, released a report assessing the relative successes and shortcomings of real estate agents. licenses and qualifications among real estate professionals. . In addition, it was to suggest where the regulation could be implemented appropriately.
This report highlighted the problematic nature of voluntary accreditation. With a new regulator with tighter enforcement powers likely on the horizon, and the pandemic real estate boom set to set in in the coming months, it now looks like the industry is embarking on a measured scrutiny. of how accreditation courses influence the industry, and what they offer to professionals.
Regulation on the horizon
This industry is particularly well endowed with industrial organizations of varying reputations offering study programs, accreditation programs and qualifications. To name just a few of the more recognized organizations, the Royal Institution of Chartered Surveyors (RICS), the Institute of Residential Property Management (IRPM) and the Professional Skills Assessment (APC) all offer level accreditation aimed at to help professionals assert their quality of service in a crowded and competitive market.
The extent of the availability of these “stamps of approval” raises a number of relevant questions facing the industry.
With little active regulation towards sales and rental agents, and neither of these schemes is a mandatory factor for being licensed to practice in the UK, what benefits do they offer to the professionals who undertake them? Are they of substantial value to the industry as a whole? In response to growing public mistrust of the profession (more on this soon) and their necessary function in a key UK economic market, should these schemes be made mandatory?
Restoring confidence in the sector
Most of the laws we have in place governing real estate agents are vetted by the Trading Standards teams, including the Estate Agents Act 1979 and the Tenant Fees Act 2019. Conversely, as long as accreditation programs remain voluntary, they exist outside the regulatory mandate.
It is for this reason that the aforementioned RoPA report took a fundamental stance against the current system of voluntary engagement with qualification programs, stating that it “recommends that all who perform real estate agency work be regulated” .
This raises a singular question: how will this benefit the real estate industry?
There are many influencing factors driving this move towards stronger regulation in the industry, but none are as important as trust. A study by Ipsos Mori found that less than a third (30%) of UK adults’ trust ‘the honesty of estate agents – less than half the level of trust admitted to’ the average person on the street “.
It is more than a cursory critique of the profession. As the vast majority of UK residential sales and rentals will necessarily go through an agent or agency, trust is essential, while poor standards and practices will invariably tarnish the reputation for quality and efficiency of the service offered.
Affirmation of a more rigorous compulsory certification course will of course not restore confidence on its own, but will go some way in raising professional standards to a satisfactory minimum expectation.
Professionals will benefit
It is impossible to discuss the role of accreditation courses without recalling the advantages they provide to real estate professionals.
The UK property market is a hyper-competitive environment – and that is unlikely to change for the foreseeable future. Therefore, attracting buyers, sellers, landlords and tenants in the face of public mistrust requires demonstrable credibility and reliability on the part of professionals. The ability to indicate obtaining and maintaining a globally recognized professional designation will help agents stand out in a crowded and uncertain marketplace.
Those looking to undertake a study program can look to MRICS or FRICS (member or fellow of the Royal Institution of Chartered Surveyors). Beyond the simple accreditation of development courses, they establish a framework of professional standards and enforce compliance on its members. These include continuing professional development and professional liability insurance.
As part of the University of Manchester MSc Real Estate, a blended online and in-person course, we engage directly with industry to ensure up-to-date representation of the industry as it operates and deliver a curriculum studies as relevant as possible. This first-hand experience elucidated the value of qualifications in this sector; raise the standards of agents, improve their ability to work successfully in the face of rapid changes in demand and market expectations, and therefore offer greater opportunities to advance in their careers.
For me, the most obvious lesson the real estate industry must take from the pandemic is the enduring value of achieving and maintaining high levels of professional skills, and applying it to the highest possible professional standards. If the market does indeed calm down after a frantic 12 months, professionals would be well advised to seize such an opportunity to determine where their skills have been scattered by Covid-19, and seek to undertake a meaningful development process to ensure they can meet the challenges that are sure to arise in the post-pandemic economy.
Mark Shepherd is Course Director for the University of Manchester MSc Real Estate Online Blended Course.