Instead of the Government trying to regulate estate agency, if new online media (or new online business models specifically offering house advertising) were able to compete with estate agents on a level playing field, the effect would be that estate agents would be less able to guild-the-lily in order to win instructions because the online presences would help to expose such bad practice.
For example, if a badly set up estate agency tried to win business by over-estimating asking prices, online business models with more honesty, accuracy and less incentive to exaggerate would be quoting lower asking prices. This would result in more houses being sold outside of the estate agency monopoly, effectively causing the badly set up estate agency to loose business.
It would also have the effect of helping those wishing to sell and move, to accomplish that by using an online house-marketing service directly, or without the necessity of having to employ an estate agent. It would therefore be a WIN-WIN situation, both for the housing market itself and for those estate agents that are able to offer a trusty and reliable service.
No red tape would be involved in this change of tack, just the internet and the 90% of people who appear to want to do without estate agent antics.
Posted by: Property Match (UK): The modern way to market houses