New proposals on the payment of referral fees to estate agents are expected to be announced next month, according to the Ministry of Housing, Communities and Local Government.
Matt Prior, head of the Ministry of Housing’s Home Buying and Selling Team told the Guild of Property Professionals’ annual conference: “The Government wants transparency on referral fees. If this can’t be achieved, and if it doesn’t work, we will look at the case for a ban.”
Junior Housing Minister, Heather Wheeler, said later that the National Trading Standards Estate Agency Team (NTSEAT) – set up to protect consumers and businesses by enforcing the Estate Agents Act (1979) – was to bring in an initiative aimed at bringing ‘excessive’ referral fees to an end.
As well as the guidelines, the Property Ombudsman is expected to issue an updated code on this issue before a full review of the revised fees system in about a year’s time.
Transparency for consumers needed
Last year, a survey for the Council for Licenced Conveyancers found that a recommendation from an estate agent was the main factor influencing a consumer’s choice of conveyancer.
It also found that 59 per cent of those who accepted a recommendation did not know whether or not the estate agent was paid a referral fee for this.
Speaking at the time, Heather Wheeler said: “The findings from this valuable survey demonstrate why it is so important that estate agents are transparent about referral fees.
“That’s why we are working with the industry to ensure estate agency fees are clear, so consumers can make an informed decision before they decide to purchase.”
Why Wards Solicitors never pay referral fees
Wards Solicitors never pays referral fees to estate agents for recommending us to clients in need of a conveyancer – despite payments being common in the current market.
Every year we handle thousands of conveyances and during more than 100 years in practice – and with the origin of our business in conveyancing – have built a name not only for reliability but expertise reflected in a consistently high number of personal recommendations and excellent satisfaction levels.
We know that many estate agents do in fact regularly recommend us but that this is based entirely on our experience, extensive local knowledge and reputation for reliability. And we believe that this, rather than a financial transaction, is exactly how a recommendation system should work.
If you need help with any conveyancing issue, please contact Wards Solicitors’ specialist Conveyancing team or pop in to one of our 11 local offices.