There are few consumer topics which get people more exercised than the issue of property prices. For a State which had grown accustomed to ownership at reasonable cost, a surge in demand has made ownership difficult to afford for many new entrants and impossible for some.
Just three years ago, total mortgage lending amounted to €40 billion; today it is over €80 billion. Part of the rise can be put down to the increase of the housing stock, but much of it is due to the explosion of prices.
It is little wonder then that unscrupulous practices in the selling of property which were tolerated for decades have become the focus of great dissatisfaction, even if they only occur in a small minority of transactions. The legislation still underpinning the industry is the Auctioneers and Estate Agents Act of 1947. Ancient legislation such as this means, for example, that anybody, on payment of €12,500 into a High Court bond, can set themselves up as an auctioneer. No real assessment, no experience required, no qualifications necessary. An overhaul, to put it mildly, is long overdue.
The Minister for Justice, Equality and Law Reform, Michael McDowell, has announced that he will set up an independent authority aimed at tackling malpractice. The establishment of this statutory authority was the principal recommendation of an expert review group which delivered its recommendations to the Minister last week. The recommendations are far from radical and there will be dissatisfaction that some thorny issues have not been tackled adequately. In addition, Mr McDowell did not confirm that all the review group's recommendations would be enacted into legislation except to say that the new authority would have monitoring and inspection powers. It is way too soon therefore for would-be property buyers to assume that they will get the protection they deserve.
The review group said it was "unrealistic" to outlaw the practice of gazumping in spite of the pain and financial cost it inflicts. Gazumping can be outlawed if the will is there and, at the very least, legislation could discourage it. Guide prices given for properties are frequently set, with the connivance of the auctioneer, at a level at which the vendor has absolutely no intention of selling the property: a cynical drive to suck in more would-be buyers. The review group recommends instead the establishment of advised minimum valuations. This will achieve nothing. Would-be property buyers are not as well served by the recommendations as they deserve to be. Hopefully, the Minister's legislative proposals will go much further.