Are cash house buying companies regulated?

Recent data shows that over 30% of all homes sold last year were purchased by cash house buyers.

However, most of these sales were made to unregulated open market buyers rather than directly through regulated cash house buying companies, meaning many homeowners do not have access to a formal redress system in case something goes wrong.

At The Property Buying Company, we are committed to providing a hassle-free, transparent service that prioritises our customers at every step of the process, and offers a route for redress. Our dedication to excellence is why we are proud to be the UK’s most rated cash buyers, with over 2,000 excellent reviews.

We are one of the founding members of the National Association of Property Buyers (NAPB), as well as a proud member of The Property Ombudsman, both of which means we follow a strict set of guidelines that ensures we treat you fairly throughout the process.

What are regulated property buyers?

Regulated property buyers are professionals or companies with expertise in property valuations, underwriting, management and residential property sales. To qualify as regulated, they must be members of recognised trade bodies such as The Property Ombudsman or the National Association of Property Buyers.

In contrast, most property buyers on the open market are unregulated, as there is no requirement for them to be. While they must pass Anti-Money Laundering (AML) Checks, many operate independently, making one-off purchases without the need for regulatory oversight.

Examples of unregulated property buyers include:

• Regular buyers on the open market.

• Individual property investors.

Regulated property buyers, however, are usually involved in frequent transactions and are motivated by the intent to hold or resell houses. These buyers are members of trade associations that enforce strict codes of conduct and offer redress schemes, providing a clear route for customers to raise complaints if necessary.

Examples of property buyers who should be regulated include:

• Property cash buying companies.

• Property investment firms.

• Property developers

• House part exchange companies.

How do I know if a cash house buying company is regulated?

If you’re trying to verify whether a cash house buying company is regulated, start by costing their website. Look for logos indicating membership with the National Association of Property Buyers or The Property Ombudsman. These logos usually show that the company follows the standards set by those regulatory bodies.

Once you’ve found these logos, it’s important to take an extra step. Cross-check the company’s membership status by visiting the official websites of the The Property Ombudsman or The Property Ombudsman. Both organisations maintain up to date lists of current and past members.

A key point to watch out for if the company was previously a member but has been removed or stricken off. If a company has been removed from these memberships, it means they are no longer regulated, and it’s advisable to avoid doing less with them as they are operating without proper oversight.

Is the quick house sale market regulated?

It may be hard to believe but cash house buying companies and the market as a whole aren’t actually regulated by law, which can leave you exposed to companies who are unprofessional and dishonest.

However, the sector does have two regulating bodies, which cash house buying companies can be registered with, but the joining of these companies is voluntary. These bodies are called the National Association of Property Buyers and The Property Ombudsman.

Both these governing bodies work hand in hand because to be a member of the NAPB, the company must also be registered with TPO. The NAPB was formed to put self-regulatory processes in place to ensure companies operate with transparency, fairness and honesty. They have their own codes of conduct on top of companies following the rules of TPO.

TPO is a scheme that aims to provide a resolution service to any disputes between customers and the cash house buying companies. This organisation isn’t actually a regulating body and more acts by offering a layer of protection to customers, should anything go wrong.

When looking for a quick house sale company, it’s important you check whether or not they’re members of these organisations. If you check whether the company is a member of the NAPB, then this will mean they’re also a member of TPO. To check if they’re a member of the NAPB, use their official website, as some companies will use their image on their website, without even being a member, in a bid to look more reliable and mislead customers.

Are homeowners protected if the buyer is not regulated?

Selling your house to an unregulated quick house sale company can expose you to several risks. Once of the main concerns is that these companies are not bound by a code of conduct, meaning they may treat you unfairly or unprofessionally.

A common issue with unregulated buyers is offering an initially high price for your home to gain your trust. As the process progresses, everything may seem fine, but at the last minute, they may drastically reduce their offer, leaving you in a difficult position. In many cases, sellers feel pressured to accept the lower offer, which can result in a significantly reduced sale price — potentially even putting you at risk of negative equity.

If you’re unhappy with how an unregulated company has treated you, your options for recourse are limited to leaving reviews on platforms like TrustPilot or Google Reviews. In contrast, selling to a regulated cash buyer provides a much higher level of protection. 

If something goes wrong, you have access to a Redress Scheme, such as those provided by The Property Ombudsman, which can ensure you receive compensation for poor service or misconduct.

The Property Ombudsman

The Property Ombudsman is a scheme that aims to provide a dispute resolution service between customers and property agents. Their aim is to achieve a settlement in any dispute, and they can offer a compensatory award of up to £25,000 for any quantifiable loss, inconvenience, distress or aggravation which is caused by the property agent.

The organisation doesn’t make any profit and is government approved to provide independent redress. Every complaint put forward to the company is considered on a case-by-case basis. 

The Property Ombudsman doesn’t have the authority to take legal action or impose fines on the agent, as they’re not a regulator, but they can report agents to the Compliance Committee to decide on further action if codes of practice have been broken.

When should I go to The Property Ombudsman

You should consider going to The Property Ombudsman, if you have a dispute or complaint with a property company that is a member of The Property Ombudsman scheme and you’re unable to resolve it directly with them. 

Here are some situations where you might want to seek help with TPO:

Before approaching The Property Ombudsman, you should have already made a formal complaint to the cash buying company and given them the opportunity to resolve it. If they fail to respond within 8 weeks, or the issue remains unresolved, you can then take the complaint to the TPO.

National Association of Property Buyers

The National Association of Property Buyers is a collective group of small companies whose goal is to improve the standards within the cash house buying company industry. The NAPB ensures all their members are running a professional business and that they keep up to the required high standards throughout their work.

The NAPB also has a mandatory requirement that all members must also be registered with The Property Ombudsman. Whilst members must follow TPO’s code of practice, the NAPB also have their own codes of practice which members must abide by.

Membership to the NAPB is completely voluntary, meaning you may find you’re talking with a company that isn’t regulated. Whilst this is okay for you to do, it means you have no layer of protection should anything go wrong and there’s no governing body ensuring that the companies’ procedures are all ‘above board’, as they should be.

When to use National Association of Property Buyers for complaints

If you’ve had an issue with a cash house buying company that is a member of the National Association of Property Buyers, you can use the NAPB’s complaints process for resolution.

Here are some instances when it’s appropriate to approach the NAPB:

Similarly to the TPO process, you should contact the property buying company directly, to attempt to resolve the issue. If the company fails to address your concerns or ignores your complaint, the NAPB can step in to mediate.

Because NAPB members are also part of TPO, you can escalate your complaint to the NAPB if you feel that your issue hasn’t been fully addressed by TPO, or you want additional oversight from industry association.

Disadvantages of unregulated cash house buying companies

Deciding whether it’s worth the extra time searching for a quick house sale company who are regulated? We can make it easier for you – below are all the disadvantages of using an unregulated company:

• No code of conduct, meaning there’s no minimum level of customer service that the company need to stick to

• No set period of time, meaning a sale could drag on for months with no one to oversee the process is completed in a suitable period of time

• No need for the company to be transparent about their surveys or valuations, meaning it could be a mystery for you as to why your property is put at a certain value

• No guarantee on the offer price, meaning it could be reduced drastically at any time

• Potential for hidden costs, for example for the legal fees

• No protection for you as the seller if anything is to go wrong

What to watch out for?

When looking for a sell house fast company, there are a lot of things you need to look out for, beyond checking whether they’re regulated or not:

Protection for you

The main thing we have touched on in this article is making sure the sell house fast company is regulated and therefore have some protection for you as the seller. You should look to see if they’re members of The Property Ombudsman and the National Association of Property Buyers. 

Being members of these organisations will mean that the companies must follow specific rules and procedures to make sure everything is done as it should be and that you’re treated fairly.

If anything is to go wrong, homeowners have a layer of protection of being able to complain to The Property Ombudsman and get compensation if the company is found to have broken The Property Ombudsman’s code of conduct.

Reviews

Another thing the best cash house buying companies will have is a load of reviews on trusted review platforms, such as Trustpilot or Reviews.io, with a majority being verified to prove they’ve come from real customers.

It’s important to look for verified reviews, as a lot of companies will ask their employees to give them positive reviews to boost their ratings on review platforms, in an attempt to draw in customers.

Over-promising

Trying to pick the best quick house sale company can be difficult when you have a lot of companies who over-promise, making it difficult to know who’s promising too much and who can actually deliver what they say they can.

Often it can be tempting for companies to tell you they can sell your house at a ridiculously fast rate, like 24 hours, for 100% of the market value, but these are two statements that are completely false and unachievable.

You should steer clear of any company that is making claims that sound too good to be true – they sound too good to be true because they are! Any company making false promises shouldn’t be trusted, who knows what else they could lie about…

Genuine cash buyer

A final thing to be aware of when trying to choose the best cash house buying company is to make sure the company that you’re choosing is a genuine cash buyer.

We say this because a lot of companies who claim they can buy your house for cash are actually selling your details to another company and therefore don’t have the cash to buy the property directly from you themselves.

Why you should trust us

We’re more than just a standard cash buying company. The Property Buying Company is owned and run by property professionals, founded in 2012, and with over 100 years combined experience in the industry, you can be sure you’re in safe hands.

As mentioned, we’re members of The Property Ombudsman and the National Association of Property Buyers, so you can trust in the fact we follow strict rules and procedures to ensure everything is done ‘by the book’.

On top of this, we understand that selling a property can be stressful and daunting, so if you’re in need of a quick sale we can take all the stresses away from you and handle everything, whilst always being up for a chat to listen to your worries and help as much as they can.

We’re also rated excellent on Trustpilot, with over 2,000 reviews.

We will always be open and honest about our process and service – we will tell you upfront what we can offer for your property, and we will keep you updated throughout the process, including any issues we face and how we will do our best to overcome them for you.

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