Ombudsman for Property Services Opts Out

Ombudsman Services is to leave 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.”

This article first appeared in Property Industry Eye