As the nights get lighter, estate agents across the UK are gearing up for what is traditionally one of the busiest times of the year. But in 2024, it’s not all smooth sailing for those working in the sector, and agents are dealing with various challenges as they look to the rest of the year. Here are just some of the issues property professionals are facing in 2024: 

High interest rates 

Since August 2023, interest rates have been held at 5.25%. This has contributed to a slower market, with the pressure on people’s finances making them hesitant to take on larger mortgages or buy their first home.  

With news that the UK has officially entered a recession, the pressure is on the Bank of England to cut interest rates, and there is an expectation that they will fall this year. The next interest rate meeting will take place on 21 March 2024, but with inflation still high, it’s not yet certain when any reduction will happen.  

An ever-increasing regulatory burden  

The growing administrative and regulatory burden is a significant frustration for most property professionals. AML, in particular, keeps many estate agents up at night, with HMRC issuing a staggering £3.2 million in money laundering penalties across the sectors it supervises. 

The current range of legislative requirements facing estate agents includes, but is not limited to:  

• Anti-money laundering (AML) regulations, which require agents to conduct customer due diligence 
• The need to belong to a government-approved redress scheme 
• The compliance requirements of the Estate Agency Act 1979 

Agents across the UK must also register with HMRC. However, following a rise in applications for AML supervision from businesses that did not have the necessary risk management procedures, HMRC has had to contact estate agents to remind them of their responsibilities. The bottom line is that agents who don’t up their AML game are risking fines, a prison sentence of up to two years, reputational damage, and even closure.   

Slow transaction times 

Estate agents frequently cite the time taken to complete transactions as one of their biggest frustrations. This is not surprising considering the number of parties involved in a transaction and the steps they must follow. And it’s not just property professionals who are fed up with the protracted timescales. The sheer time it takes to complete the buying and selling process is the key reason people find home moving stressful (40%).  

Put simply, the antiquated, analogue home-buying process is letting consumers, estate agents and conveyancers down. There is too much paperwork and not enough automation.       

A lack of communication  

Estate agents must communicate with the other parties involved in a transaction. But poor communication with conveyancers, continues to be a frustration.  

The 2022 ‘Working Better Together’ report highlighted the complex and changing relationship between conveyancers and estate agents. Based on a survey of almost 500 property professionals, the report advised that both parties would benefit from building greater respect, trust, and openness in the relationship. However, despite general agreement from across the sector, two years later, estate agents still cite poor communication amongst stakeholders as a significant challenge, with both groups spending over 20% of their working days chasing or being chased.    

Technological advancements 

Advances in technology and AI are pushing businesses in all sectors to adapt and evolve, and estate agents are no exception. But alongside the undoubted benefits – particularly in areas such as improving efficiencies and reducing costs – new technology brings many new challenges. Indeed, data privacy, security, ethical use of AI, and regulatory compliance are fast becoming some of the most critical issues facing estate agents today.   

Challenge accepted… 

A leading risk and compliance consultancy, Legal Eye helps estate agents across England and Wales tackle their regulatory challenges head-on. Providing sound knowledge and practical solutions, our team of experienced associates will help you understand the regulations and industry requirements and adapt your processes and procedures accordingly. 

Removing the burden from your shoulders in 2024 and beyond, find out more about our Estate Agent AML Support Services, or get in touch today for an initial chat about how we can help. Email [email protected] or call 020 3051 2049