Before you start a real estate agency in England and Wales, it’s a good idea to familiarise yourself with the relevant legislation, requirements and necessary licenses. Ensuring your business will be completely legally compliant and free from liability is essential. And chances are, you may find that there are more required registrations and paperwork than you anticipated. That’s where our property law team comes in.
We have extensive experience supporting clients with the complexities of English property law in both commercial and residential spaces. In this article, you’ll find a starter guide to what you need to start a real estate agency in England and Wales, as well as a look at how our team can support you through the process.
What do real estate agents do?
An estate agent, sometimes referred to as a ‘property agent’, is someone who facilitates the sale and rental of both commercial and residential property. At the very core, an estate agent acts as a kind of ‘negotiator’ or point of contact for both the buyer and seller or landlord and tenant. Their key responsibility is facilitating the transaction from start to finish:
Assisting with the valuation of your home or property
Marketing and promotion of your property and arrangement of viewings
Negotiation management between buyer and seller/tenant and landlord
Conduct checks on the buyer
Keeping momentum between the offer being accepted and the exchange of contracts/completion
Lettings agents are involved in the day-to-day management of rental properties. As part of this, they also typically collect the rent from the tenant.
Types of real estate agency licenses
There’s no specific license or qualification needed to work as a real estate agent in England and Wales. There are, however, a few other requirements that you need to be aware of:
Estate Agents Act 1979
The Estate Agents Act is the main piece of legislation that governs real estate agent’s work. It makes it a legal requirement for real estate businesses to belong to a Redress scheme.
The National Trading Standards Estate and Letting Agency Team is empowered to enforce the Estate Agents Act and the Tenant Fees Act 2019. Their primary responsibility is to regulate estate agency work across the UK. They indeed possess the authority to prohibit or issue warnings to businesses deemed unfit to conduct this type of work.
Redress Schemes
If you are an estate agent in the UK that deals with residential properties or a letting agent or property manager in England or Wales, then you are legally obliged to join what’s known as a ‘redress scheme’.
These schemes give your clients or customers a means through which they can complain about your work or services. The redress scheme essentially provides an ‘alternative dispute resolution’ method which avoids the courts and helps both parties reach a settlement, where relevant.
Register with HMRC
HMRC monitors certain types of estate agency businesses for money laundering. Under the Estate Agents Act 1979, real estate businesses that:
Act on instructions from a customer who wants to buy, sell or let an interest in land, in the UK or abroad
Introduce customers to a third party who wants to buy, sell or let an interest in land
Facilitate and secure the sale or purchase of the interest in land after that introduction
must register with HMRC before you can continue operating as a business. Failing to register could result in a penalty.
Consumer Protection from Unfair Trading Regulations 2008
The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) were established to protect consumers from unfair commercial practices. These regulations prohibit misleading actions or omissions and aggressive sales tactics that could potentially deceive or coerce consumers into making decisions they wouldn’t have otherwise made.
For real estate agencies, this means ensuring that any information provided about a property, whether through advertisements, listings, or interactions with clients, is accurate, truthful, and not misleading. Failure to comply with CPRs could result in legal action, fines, or reputational damage to the agency.
Business Protection from Misleading Marketing Regulations 2008
On the other hand, the Business Protection from Misleading Marketing Regulations 2008 (BPRs) specifically target misleading advertising and marketing practices between businesses. These regulations aim to ensure that business-to-business transactions are conducted fairly and transparently, without any deceptive marketing strategies that could harm other businesses.
Real estate agencies must ensure that their marketing materials, such as brochures, website listings, or any communication with other businesses, are not misleading or falsely represent the properties or services offered. Non-compliance with BPRs can lead to legal consequences and damage the reputation of the agency.
How we can help
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FAQs
Do I need a license to be a real estate agent in the UK?
You don’t need any particular license or qualification to become a real estate agent in the UK. However, if you’re launching a real estate business, you should take a look at the requirements that we outlined above.