An investigation by consumer watchdog Which? finds just four in 50 mortgage advisors are giving “acceptable” advice to homebuyers.

Between February and April 2008, Which? Money visited advisers in England and Scotland undercover, posing as first-time buyers who wanted advice and a recommendation.

The findings, argues the company, were disappointing.

Some 41 out of the 50 failed to provide one or more pieces of key information – which include an Initial Disclosure Document (IDD), a Key Facts Illustration (KFI), as well as making it clear whether they are offering advice or information.

Furthermore, 35 failed to do a proper check to ensure that the individual could afford to repay the mortgage.

Two thirds tried to sell the researcher insurance at the same time – often for an unsuitable product – and many failed to tailor their advice to the individual’s needs, finds Which?.

“Listening to people’s needs and giving tailored advice should be the bread and butter of a mortgage adviser’s job, but too many of the advisers that we visited took a ‘one size fits all’ approach or seemed as concerned with selling an insurance policy on the side,” said Martyn Hocking, editor, Which? Money.

During the research one adviser said of the KFI they must provide “a lot of the stuff in there is just blah, blah, blah”, while another dismissed the idea that interest rates might fall, just a few weeks before the Bank of England cut them again.

A third tried to use Kylie Minogue’s recent breast cancer diagnosis to persuade the researcher to buy critical illness cover.

“With mortgage costs soaring and the spectre of negative equity returning to the property market, it’s important that people get help to find the right deal,” said Mr Hocking.

“There are still more than 3,000 mortgage deals out there, and the difference in cost can be thousands of pounds a year, so it’s vital people do their homework and choose their adviser with care.”

According to figures from the Royal Institution of Chartered Surveyors (Rics), home sales have plunged to their lowest levels since surveyors started collecting records in 1978.

In the three months to 30 June, estate agents said they sold an average of 15 properties - this is almost 40% lower compared with the same period last year.

Prospective buyers are deterred from the market as many of them are unable to obtain a mortgage due to the current mortgage freeze and those that can get a mortgage are charged hefty deposits. Buyers who do not have the funds for a deposit of over 5% will find it impossible to secure a mortgage deal.

At a time when house prices are falling, this is seen as an encouraging sign for first-time buyers, however tightening lending conditions is proving to be a problem for would-be buyers, according to Jeremy Leaf of Rics.

One estate agent in North Yorkshire said the squeeze on lending is having a devastating affect on the market.

However, the number of surveyors reporting house price falls was not quite as high in June as the previous month.

Surveyors reporting house price falls rather than increases was 88% in June, marginally better than the 92.2% reported in May. However, all surveyors in the West Midlands held the same view that prices were falling.

Last week, the Halifax reported that house prices in the UK fell by 2% last month, and prices are 6.1% lower than they were compared with this time last year.

Its rival, the Nationwide, said that house prices fell by 0.9% on average last month, with the average home costing 6.3% less than 12 months ago.

As a result of falling home sales, many estate agents are closing offices. The housing slowdown is also having an impact on housebuilders after Persimmon, Barratts, Bovis and Redrow Homes all announced job losses last week.

The housing market is suffering currently due to falling house prices while the current squeeze on mortgage lending is also having a devastating affect.

In a bid to kick-start the mortgage market, the Council of Mortgage Lenders (CML) has announced plans which include UK banks and building societies to offer new mortgages.

Furthermore, it wants the Bank of England to guarantee a market in mortgage-backed securities and covered bonds.

As a result, funds would be pushed back into mortgage lending by encouraging investors to buy mortgage-backed securities.

The mortgage market is suffering due to a shortage of available funding to support new mortgage lending. This has resulted in the amount of mortgage deals on the market diminishing and the cost of these types of loans rising.

Back in April, the Bank of England launched the Special Liquidity Scheme which was designed to improve the liquidity position of the banking system and raise confidence in financial markets.

However, the CML recently said the benefits of the scheme have yet to be felt by lenders.

According to the CML, the new scheme would be quick and easy to set up and would restore confidence back into the market.

The plan will no doubt be good news for first-time buyers who are desperate to get onto the property ladder as house prices continue to fall but are unable to secure a mortgage.

Earlier this week, the Government said it was considering cutting stamp duty in a bid to kick-start the property market.

According to many experts, stamp duty is one of the major factors that is discouraging buyers from the market.

However, according to Ministers, changes to stamp duty would only make a difference if they were accompanied by further efforts to increase the supply of mortgages.

The Association of Residential Letting Agents (ARLA) has published research entitled “The Modern UK Housing Market - Origins and Prospects”, in which it predicts that rents in the private rented sector will rise significantly in the short term.

The report, prepared by Professor Michael Ball of Reading University, forecasts a 10% to 15% rise in rents both this year and next, with stronger demand created by the fact that young people are delaying the purchase of their first home.

The study asserts that the private rented sector is a stablising influence on the UK residential property market because it accommodates those who in the current housing market downturn would be over-stretched borrowers with rising negative equity.

It also concludes that house prices will almost certainly increase faster than commercial real estate over the longer term and that residential property therefore provides better investment potential.

The report estimates the value of properties in the UK private rented sector at over £500 billion.

The figures is ahead of the total of all privately-owned commercial property, including offices, shops, hotels, factories, warehouses and leisure facilities.

According to Professor Ball, the typical UK rental property is a terraced house in an outer or inner town or city suburb.

Only around 13% of such properties were built after 1985, with approximately two-thirds dating from before 1945 but recently modernised.

Finally, the author of the report predicts that affordability problems are likely to continue for those hoping to get a foot on the property ladder, even if the housing supply increases.

Sir Bryan Carsberg, a distinguished academic and businessman and former head of the Office of Fair Trading (OFT), considers that estate agents, letting agents and managing agents who handle residential property should be subjected to formal regulation.

He has prepared a report jointly commissioned by the National Association of Estate Agents,

Association of Residential Letting Agents and Royal Institute of Chartered Surveyors, which has made recommendations on future improvements to the private residential property market.

At present, estate agents are negatively licensed, which means that anyone can set up in business

without mandatory qualifications or any other permission. The OFT’s powers are limited, and can only ban estate agents if their conduct is deemed to be unfit and improper.

In the report, Sir Bryan said: “I recommend that landlords, letting and managing agents should be subject to appropriate regulatory requirements in order to achieve consumer protection, efficient markets and cost effectiveness.

I think that the markets for estate agencies, letting agencies and managing agencies are not working well because clients are not well informed about the qualifications of different agents and about what to expect from them in the way of service,” he added.

Sir Bryan has called for the establishment of formal regulatory bodies similar to those in operation for other professions. He also wants all estate agents to become members of a redress organisation such as an Ombudsman scheme, which will probably become a legal requirement later this year.

He also suggests that Home Information Packs (Hips) should become voluntary, because the system is not working. They were originally designed to provide information upfront to potential house buyers and to cut short the process of buying a home.

Sir Bryan’s report contains 30 recommendations to improve the way the residential property market works, which have largely been welcomed by leaders in the property industry.

Home Information Packs (Hips) were introduced to speed up the home buying and selling process as well as providing consumers with a faster and more cost effective service.

However, they have been subject to heavy criticism since they were introduced.

Hips were launched on August 1 to include properties with 4-bedrooms or more and rolled-out to include 3-bedroom properties on September 10. They included all properties from December 14 last year.

There is suggestion that a drastic review of the property buying and selling industry is required, according to a new report entitled the Carsberg Review of Residential Property.

The review is intended to scrutinise private residential property in England and Wales and was commissioned by the Royal Institution of Chartered Surveyors (Rics), the National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (ARLA).

One item mentioned in the report was that the home buying process has not been improved since Hips were introduced.

The report has been welcomed by Peter Bolton King, chief executive of the NAEA, who said the organisation has been against Hips since their launch date and doesn’t believe they would ever improve the home buying process. He believes that Hips should become a voluntary requirement.

The Association of Home Information Pack Providers (AHIPP) claims that Hips will continue to part of the house buying and selling process for the foreseeable future. AHIPP highlighted that Hips were launched to protect consumers, as well as estate agents, conveyancers and mortgage lenders.

Mike Ockenden of AHIPP understands the point of view of estate agents but said they need to understand their legal responsibilities in respect of Hips.

In order to protect themselves, and of course their customers, they should only use packs that carry the Hip code logo, concluded Mr Ockenden.

According to research from Abbey Mortgages, falling property prices means 1.2 million UK homeowners are planning to move to a bigger property over the next year.

A correction in the housing market means Britons are on the lookout for a bargain.

In addition, 827,000 homeowners are looking to sell up in order to rent, with a view to the market reaching a low before they buy again.

However, 1.1 million who are struggling during the ongoing credit squeeze means downsizing their property in a bid to free up capital.

Commenting on the research, Phil Cliff, director of Abbey Mortgages, said for some people, a falling house price environment is not necessarily bad news.

While the bulk of homeowners are planning to stay put and wait for the current volatility to end, 2 million think that house price falls are a good reason to move, continued Mr Cliff.

This could be because house price falls bring a larger property within their grasp or because they think they can cash in if they sell up now and wait for the market to hit its bottom, adds Mr Cliff.

Abbey Mortgages advises seeking advice before making this sort of move as for most people, their house is their largest asset.

Abbey’s research also finds that the current uncertainty surrounding the housing market means that 12% are in wait and see mode.

Research earlier this week from the Council of Mortgage Lenders discovered falling house prices suggest that there is likely to be an increase in the number of people who are in negative equity (where their mortgage is worth more than their house).

Barratt Developments, the company behind Barratt Homes, is facing a crisis as its share price went into freefall today.

At the opening of January 2007, share prices for BDEV - the company ticker on the London Stock Exchange - were 1266p per share. At the time of writing, they have become worth only 53 pence.

While the existing downturn in the property markets is certainly bad news for home builders in general, Barratts remains specifically exposed to fall out from the Credit Crunch.

This is not least because of its buy out of builders Wilson Bowden last year for £2.2 billion, which has saddled Barratts with massive debt at a time when credit conditions have become adverse.

Wilson Bowden is already suffering problems with their development schedule, not least the massive regeneration of Southampton’s docklands at Ocean Village.

The company has halted work at Admiral’s Quay, leaving only three of the planned five blocks planned as built, and only two of the tenshops and bars completed.

Commentators see the move as caution in the face of concerns about long-term demand in the face of over-supply.

Barratts has already issued a profit warning earlier in the year over falling sales, but now faces an uncertain future because its market capitalisation of just over £200 million is far below its debts of £1.7 billion.

While Barratts could follows the capitalisation path that a number of UK banks have followed, the tenuous position of the Barratt’s balance sheet may mean raising capital proves difficult at best.

The company could be forced to sell existing land holdings and developments, which in conjunction with a falling property market could help glut land inventories for sale and reduce the price of land further, and further impact the price of individual developments for sale.

What complicates the matter further is that hedge funds are aggressively shorting shares in UK house builders - borrowing shares from pension funds, and then hedging price falls, and returning the shares after a tidy profit is made.

Similar actions were believed to have hastened the demise of Northern Rock.

In the meantime, the short-term future of Barratt could be bleak indeed, unless private equity views the company as a bargain and seeks to develop its long-term future.

Earlier this week, Humberts the estate agency chain entered administration but has now been bought out by a business restructuring group.

Humberts has sold certain assets to Mercantile Group for total net consideration of £3.16 million (including cancelled deferred consideration amounting to £1.1m).

Smith & Williamson, the accountancy and financial advisory group, has been appointed by the directors of Humberts Limited, one of the Company’s trading subsidiaries.

Smith & Williamson will act in the restructuring and administration of Humberts Limited (and certain subsidiaries of Humberts Limited).

Mercantile Group owns assets globally, including a substantial UK property portfolio. Furthermore, it owns 50% of Chestertons estate agents, which it owns jointly with Concensus Group, a considerable shareholder of Humberts Group Plc.

As well as 10 franchises, Mercantile has bought 34 branches which were part of the original Humberts group. It has also purchased Farleys and Wellingtons estate agencies, which are going concerns and were not part of the administration, as well the Humberts name.

This leaves 14 of the 80 Humberts branches that were not part of the deal. Discussions are currently taking place to sell these.

Commenting on the announcement, newly appointed executive chairman John McLean, said following discussions with several parties, we have successfully concluded the sale of assets which has secured value for the Company whilst successfully securing continuity of employment for the majority of the Company’s employees.

We have tried to minimise the disruption to everyone involved throughout this difficult process and despite the very difficult conditions I am pleased that we have managed to secure the greater number of jobs across the group.

Back in April, Humberts, which is one of England’s largest chain of estate agents, had its shares suspended on AIM pending clarification of its financial viability.

In a statement to the Stock Exchange, the group said the request to suspend its shares was made pending clarification of its financial position and added that it was investigating a potential restructuring.

Earlier this year, shares in the company crashed by more than 40% after warning that it will slump to a loss in the first half of the year as the housing market slows.

In related news, Movewithus, the biggest network of independent estate agencies, said of the estimated 12,000 agents, at least 4,000 will close by next year.

The UK’s largest estate agency group, Countrywide, which incorporates Bairstow Eves, Gascoigne-Pees and RA Bennett & Partners, has closed 50 branches so far this year and is planning more cost-cutting.

Landlords that thought they had seen the last of any more legislation from this Government affecting their buy-to-let investment properties will be sadly disappointed later in the year.

The latest bit of paperwork to become a part of Landlords expenses is the Energy Performance Certificate (EPC). These documents are a spin off from the governments much debated HIPs or Home Information Packs.

What are Energy Performance Certificates?
These certificates are for all buildings and will be required whenever a building is constructed, rented or sold. The Energy Performance Certificate (EPC) is broadly similar to the labels now provided with domestic appliances such as refrigerators and washing machines. Its’ purpose is to record how energy efficient a property is as a building. The certificate will provide a rating of the energy efficiency and carbon emissions of a building from A to G, where A is very efficient and G is very inefficient.

The idea is that EPCs because they are produced using standard methods with standard assumptions about energy usage so that the energy efficiency of one building can easily be compared with another building of the same type. This in theory will allow prospective buyers, tenants, owners, occupiers and purchasers to see information on the energy efficiency and carbon emissions from their building so they can consider energy efficiency and fuel costs as part of their investment.

An EPC is always accompanied by a recommendation report that lists cost effective and other measures (such as low and zero carbon generating systems) to improve the energy rating of the building. The certificate is also accompanied by information about the rating that could be achieved if all the recommendations were implemented.

What do Energy Performance Certificates contain?
The EPC contains a mixture of information about the energy efficiency of a landlord’s residential investment property which is listed below the following headings:

Reference information
This includes the type of property (e.g. house, flat), the unique reference number (as stored in the central register) and date of the certificate.

Estimated energy use
This is based on standardised assumptions about occupancy and heating patterns. An estimate of the current and potential energy use, carbon emissions and fuel costs for lighting, heating and hot water is provided. The actual energy use depends on the behaviour of the occupants.

Energy Assessor details
This includes the assessor`s name, accreditation number, company name (or trading name if self employed) and contact details.

Complaints
The certificate will provide information about how to complain or how to check the certificate is authentic.

Energy advice
The certificate provides basic advice about energy efficient behaviour.

Recommendation report
The certificate is accompanied by a report which includes recommendations to improve the energy ratings. Recommendations include cost effective improvements and further improvements (that achieve higher standards but are not necessarily cost effective). For each improvement the level of cost, typical cost savings per year and the performance rating after improvement are listed. The potential rating shown on the certificate is based on all the cost effective recommendations being implemented.

When is an EPC needed?
An Energy Performance Certificate is required when a building is constructed, sold or rented out. An EPC is valid for 10 years, except for sales of homes which are subject to the Home Information Pack Regulations 2007, where a Home Information Pack (HIP) is required. In these cases an EPC must be no more than 12 months old when the property is first marketed.

A landlord is responsible for ensuring that a valid EPC for their buy-to-let residential investment property is available to all prospective tenants from the 1st October 2008. The EPC and recommendation report must be made available free of charge by a landlord to a prospective tenant at the earliest opportunity and no later than:

when any written information about the building is provided in response to a request for information received from the prospective buyer; or when a viewing is conducted; or if neither of those occur, before entering into a contract to sell or let.

An energy performance certificate does not have to be made available if:

the seller believes that the prospective buyer or tenant is unlikely to have sufficient funds to purchase or rent the property or; is not genuinely interested in buying or renting that type of property; or the seller or landlord is unlikely to be prepared to sell or rent out the property to the prospective buyer or tenant (although this does not authorize unlawful discrimination)

Where do I get one & what happens if I don’t have one?
A Landlord can only obtain an EPC from a licensed Domestic Energy Assessor (DEA). Because of the recent introduction of this legislation there were initial concerns that there could have been a shortage of DEA, but as yet this has not materialised. However, landlords are advised to not wait to the last minute before the 1st October deadline.

Landlords or letting agents that don’t have a valid EPC risk being reported to the Local Trading Standards and also the Office of Fair Trading. Penalties include fines of up to £5000 and loss of the right to operate.

If you require any further information in this respect, or would like us to organise an EPC for your property, please contact us for more information.