Call to ban agents from selling services to buyers while acting for sellers

Estate agents should be banned from selling services, such as conveyancing, to buyers while acting for sellers in the same transaction.

The call has come from the HomeOwners Alliance, which is warning there is a conflict of interest of the type that is banned in other professional sectors such as accountancy and law.

It is also accusing agents of a lack of transparency, and says that while agents are obliged by the Property Ombudsman to declare referral fees, it sees little evidence of this happening.

Altogether, the group calculates that 300,000 buyers and sellers a year could be using an agent’s mortgage or legal services, without shopping around for the best deal. It says this increases costs to consumers, hampering healthy competition.

The group warns that 55% of buyers feel pressured by agents into using particular mortgage services, 49% into using conveyancing and 41% into using surveying.

Overall, the research, which questioned over 2,000 people at the end of last year, suggests that 25% of those who have used an estate agent to buy or sell a property have felt under pressure to use the agent’s in-house services.

Paula Higgins, chief executive at the HomeOwners Alliance, said that as a minimum there needs to better enforcement of the existing regulation that requires all estate agents to declare their referral fees, with estate agents taking advantage of their unique position being penalised.

She said: “The great majority of estate agents are upstanding and a vital part of the home buying and selling process, but sadly a small number may be encouraging their clients to use their services for all the wrong reasons, not to help smooth the process but for financial gain.

“Any estate agent that favours buyers who use in-house services is doing a disservice to their client – the seller – as well.

“Sellers can also lose out because estate agents have an incentive to sell a property to a buyer who is taking out a mortgage or life insurance with them rather than one that isn’t.

“While there is nothing wrong with agents offering services to their clients and receiving a fee for this where it is done in a transparent way, it’s important to note that their client is the seller, not the buyer.

“Offering services to both can lead to a damaging conflict of interest and harm competition.”

However, the HomeOwners Alliance itself is part owned by conveyancing comparison provider ULS, and gets some of its income through mortgage and conveyancing services.

It admitted to EYE – as detailed on its website – that it receives referral fees for those taking mortgage or conveyancer services through its website.

A spokesman added that they were not against referral fees but believed there needed to be more transparency.


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  1. RealAgent

    I think the last part of this article sums it up; total hypocrisy.

    Great journalism for having spotted it however.

  2. nextchapter

    I think you could look at this in another way as well.  We have spent years finding competent efficient solicitors that get the job done properly, and years finding the right mortgage advisor to help save clients money.  Every client or prospective buyer has been over the moon with our referrals, comparing them to their previous bad experiences with conveyancers and mortgage advisors, that they knew nothing about, after finding them from a google search.  The referral system has huge advantages. Why would Estate Agents whose service and reputation means everything to them, refer bad business.  Those that do, of course should be questioned, but without your reputation as an Estate Agent, you’ll lose business and won’t win any new business right? The referral system works for everyone!

    1. Bless You

      Your comment would have sounded like simple common sense to most people. That was b.o. before online…… they have rewritten the bad ethics book the last 2 years.

    2. PaulWilson32

      Countrywide here can be figured as a good example. They refer exclusively to their solicitors (or at least they did the last time I dealt with them ~ 3 years ago) and their solicitors were utterly dreadful. 0800 callcentres, really?

  3. TwitterSalisPropNews53

    “Sellers can also lose out because estate agents have an incentive to sell a property to a buyer who is taking out a mortgage or life insurance with them rather than one that isn’t.”

    That is a very serious accusation indeed. Any Agent found guilty of that could face some seriously hefty lawsuits.

    Agents do work with the very best conveyancers who they know will get the deal through expertly fast.

    BUT are there Agents who will refer to conveyancers who pay the highest cash bung? Or who give them work (probate sales), so they feel obliged to use them even though they are mediore?

    I once had an estate agent say to me “I did not know how awful their conveyancing was, but don’t tell your client not to use them as they are paying us £300 to refer to them – that money comes to me”


    Just like there are excellent and shocking conveyancers. Pick the right estate agent , and pick the right conveyancer.

  4. ArthurHouse02

    I’m really confused by this article, and probably Homeowners Alliance are getting confused by their own figures. On one hand they are suggesting that estate agents in general are a really good bunch and only a “small number” are part of the problem, yet to dramatise the statement 55%, 49%, 41% get pressured into using x service…this is not a small number.

    HOA advice is often bent out of shape, biased against estate agents and based on poor information and figures plucked out of fresh air. The figures stated from my own experience dealing with people selling or buying through the usual culprits are highly exaggerated, but stats like 10%, 5% and 3% wouldnt make very interesting reading.

  5. smile please

    I am getting a little fed up of people trying to reduce our industry to a charity.

    We work in one of the most stressful industries and offer a lot for very little and we mostly all act on no sale no fee.

    What other industry only gets paid on results?

    1. MarkRowe

      Many will read that as ‘oh you poor estate agent, you’!

      However, I couldn’t agree more with this comment.

      Why is it that estate agency isn’t treated like any other business whereby a service is chargeable, whereby recommendations or referrals are rewarded? Does this mean every time a ‘business’ of any kind offers an cash incentive to a previous client for recommending them to others, the receiver of that referral payment should be hauled up too…? It’s a crazy and hypocritical world we live in.

      1. Bless You

        Forgive them brucie for they do not know what they do…
        Stay strong guys.. the Lord knows the truth.
        Bless us all.. 
        Except online agents…. obvs

  6. Peter Ambrose (The Partnership)

    The drums do seem to be beating louder about referral fees.

    As this article points out, the issue is more about transparency rather than the fees themselves.

    We think that the key issue is whether a recommended supplier actually delivers, and agents must be able to prove that this is the case.

    Rather than be mislead by the promise of referral fees, the actual delivery should be measurable and transparent.

    That’s why we’ve decided to offer agents live performance data on the cases they have with us.

    We believe that all law firms should have to do this…

    Peter Ambrose

    Managing Director



  7. Rob Hailstone

    Am I missing something here? Most buyers are seller’s. If an agent can recommend a conveyancer to a seller aren’t they also recommending to a buyer?

  8. PeeBee

    HomeOwners Alliance is a fatally flawed model of what is a fundamentally flawed concept.

    Some may also think that it is run in an abominably flawed way.

    I’m not aware of a single homeowner that is allied to it.

    Unless, that is, the count includes certain call-centre ego-on-legs types – then they’ve probably got a couple of bezzies on their team.

  9. BenNorthEast62

    I used to work for a large company with a network of branches. I was forced to recommend a solicitor who paid the highest referral, they were terrible, never answered the phone and were notoriously slow. I hated recommending them but had to do what my bosses wanted.

    I am now an independent and working for myself, I always recommend the same solicitor (when appropriate) and do not take a fee for it. I recommend them on the basis that they perform best in my local area and will always take my call.

    I am not interested in a referral fee of what I would guess is approximately £100 for most agents? but am interested in exchanging on a higher number of instructed properties,

    I believe this is also the best thing for my clients hence why I do it.

  10. femaleNeg8804

    WHY would they use a company/companies that hamper their transaction or slow the process down/ cause fall throughs….. for the sake of like £50 vs the 1% fee….. god these people have no work to do so picking apart every part of the industry!!

    1. PeeBee

      “… for the sake of like £50 vs the 1% fee…”

      HOW much??

      femaleNeg8804 – it’s BIIIIIG money for some Agents.

      Even here ‘oop North there are some earning £300 for sale & purchase referrals (which form majority part of the business)

      Same Agents would list for a grand in order to shut out the competition.

      Referring mediocre conveyancers pays them well!

      And let’s not even go into those of the nowhere-to-be-seen-on-the-highstreet model…

  11. htsnom79

    There are obviously some very pious and reverent estate agents out there which may surprise some

  12. PaulWilson32

    Having worked in suburban agency where it is absolutely the norm to receive referrals for conveyancing and huge kickbacks from mortgage and life insurance referrals (sometimes in excess of the property fee!) I am absolutely in favour of outlawing this practice altogether.

    I have, first-hand, seen mortgage, life-insurance, and conveyancing taking buyers be recommended as “more transparent and controllable, and therefore recommended”, over experienced, cash buyers (EDIT: Forgot to add, experienced, cash buyers who have their own and reputable solicitors)

    Buyers and sellers need to wake up, this isn’t a little kick-back or a payment in exchange of service, this is gross determination on the agent’s behalf to extract as much money as possible irrespective of the client’s best interests. And it’s happening on a national scale.

    The industry needs regulating, and ASAP.

    1. Chris Wood

      None of those paid to regulate want to do the job they are paid for it seems. There is clear law-breaking on many fronts in agency, mostly through ignorance rather than deliberate, however none of the regulators appears to care. Hopefully, this will change. Until then, consumers and law-abiding agents will continue to be disadvantaged and suffer financially.

      1. PaulWilson32

        Thank you, I agree.

        Furthermore, upon thinking about this article overnight, I happen to think that buyers’ and sellers’ transactions are merely a consequence of a ‘referral industry’ and not a property industry, as their transactions become secondary to these fees in many cases. It truly is staggering.

  13. b46

    its also worth pointing out that solicitors have to make it clear in writing to the client that they are paying a referral fee.


    why is it lately that agents seem to be getting hounded more and more to do the solicitors and everyone elses jobs, but fees and income is going down.

  14. smile please

    A lot of comments on this thread from either uninformed or ill educated people.

    Most of them are probably from either employees or people outside the industry.


  15. GretaMacdonald

    I’ve recently used this comparison site to compare buying a house solicitor fees. I’ve also worked with several solicitors even before that, and from my own experience (so far), the fees I received were transparent and relevant to the services I’m availing. I think it’s all about ensuring that you’re hiring dependable solicitors. If you’re sure that you’re working with a trusted expert, then you can expect that the fees they’ll give you are also transparent. In other words, just avoid working with unreliable solicitors and you’re sure that you won’t be wasting any money.


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