The National Trading Standards Estate Agency Team, with the support of The Property Ombudsman and the Property Redress Scheme, has today launched a survey to assess the use of referral fees among estate agents.
Following the published response on April 8 to the Government’s call for evidence on home buying and selling, the Ministry of Housing, Communities & Local Government (MHCLG) has set up a working group to look in greater detail at the issue of estate agents and referral fees.
James Munro, head of NTSEAT, said: “The consultation responses to whether the Government should take further action to enforce current transparency regulations regarding the disclosure of referral fees were overwhelmingly supportive.
“However, at the inaugural meeting, it was decided that more information was required from agents about the nature of fees they currently received. The results of this survey will feed into the working group discussions.”
Addressing delegates at The Property Ombudsman Conference last week, ombudsman Katrine Sporle told agents that the case for a complete ban on referral fees remains under review and that greater transparency is required.
She said of the survey: “We are not asking for agents to incriminate themselves, but the Government is concerned about transparency and wants consumers to be able to make informed choices.
“The results of the survey will help provide evidence of how agents currently approach referral fees and allow the working group to discuss how the industry can work together to adopt a standardised approach of up-front disclosure.”
Sean Hooker, head of redress at the Property Redress Scheme, said: “I very much urge agents to take part in the brief survey, so that a complete as possible picture of what happens on the ground is available to the policy makers.
“By building a comprehensive profile of referral fees, it will enable the working group to make constructive proposals to the Government that reflect what fees are received, regional differences and how consumers are informed.”
The NTSEAT survey on referral fees will be available for agents to complete until July 2.
Please CLICK HERE to participate.
Only five questions. What about:
What percentage of your annual income do referral fees represent?
On average, what percentage of the conveyancer/surveyors/financial advisers/removals firms own fees do you take as a referral fee?
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An estate agent generally will not refer a client to a mortgage or legal company unless they know they are good. This is a kind of mutual quality control which stops the online cowboys .
So on this evidence I expect the gov’t. Will ban the practice in months.
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I think there should bs just one question.
If you were a turkey would you ban Christmas?
Surely there must be something better Whitehall can spend their money on, like anti stress balls in the shape of a house or something cute like that.
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Politics by headline and the angry of the internet is all that is happening. Nasty landlords ripping tenants off…right lets get them; agents ripping tenants off. let’s get them too; referral fees lets get them too, diesel kills fluffy animals so lets ban that too…even though the government/Gordon Brown ensured everyone bought one! Oh yes, lets build a 100 million new homes outside of urban areas so everyone has to use a car as the buses are banned for being diesel and there are no power points in the countryside to recharge the electric bus… OK, so I’m going slightly off piste, but you get the point!
The rules are in place to disclose fees from referrals …end of! The FCA introduces lots of new rules to prevent financial service corruption, yet it still happens. Enforcement I what is needed, but that will never be correctly funded and no matter what rules are in place, some one will always flout them. Small print conditions should not be used, but they are, it’s all covered under CPR.
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Let’s be clear, either a ban on referral fees is coming or some laws on how open companies are about referral will be set down. We might as well put our opinions forward rather than sit on our hands.
Some organisations will be pushing for a ban, some big well known companies will be pushing for referral fees to stay in place. I have no issue with tell a vendor or purchaser that i get a referral fee, as i can honestly say that the local solicitors being referred are excellent at what they do.
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You have to ban all payments being made from a legal firm to an estate agent. ALL. Including paying commission, as there is no good reason for a lawyer to be paying a third party invoice anyway.
If you ban all payments, then the indirect ways to get around referral fees (i.e paying inflated rates for a pretend advert in their magazine/website) are also tackled.
BUT….it will take a brave organisation to tackle it, as an eye watering amount of cash bungs trade hands, too often by mediocre conveyancers to keep in business. Without referral fees, the volume conveyancers will suffer.
YET, tackle it, and thus drive up the quality of conveyancing.
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Not a problem, but if this is happening then the solicitor isnt forwarding the stamp duty payment either? Same thing right?
Good luck if this happens, good luck chasing your vendors for payment as undoubtedly there will be the odd one of 2 who forget to pay once completion has taken place.
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Not cash bungs at all. It’s a marketing cost. With this logic Google are getting ‘ bungs ‘ for taking AdWord revenue.
Surely a legal firm would just need to make all it’s customers the owners. Then the agents get a ‘dividend ‘ for every client they get to use the service for ‘free. ‘
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I think these questions are somewhat ‘skewed’. As an example:
Do you disclose the fact you get a fee? To the Buyer, to the seller or neither. There is no option for ‘Both’ which is ridiculous as you may offer services to buyer & seller. You can see where this is going…. Agents disclose fees in <50% of cases.
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Unfortunately Eric, like most things the government get involved in, they have no understanding of the issue.
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Totally agree Eric. The questionnaire is seriously flawed to give the government their pre-agreed verdict!
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No more taxes, the UK’s biggest **** hole of a referral fee.. (I refer my employees to the tax man every pay day).
Personally I think we should ban charging anyone for anything. It would be a fairer world if everything was free and then everyone could have what everyone else has without anyone feeling less important than the next.
You can only have one of everything other than TV’s we all need as many TV’s as people live in your home! (Love Island -v- World Cup and xBox) and clothes, we are allowed 7 pairs or everything, but no more, that would be excessive, as washing machines and laundrettes would be free in my new world.
Just literally everything for free…. money shmoney who needs it.
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Wasn’t that the basis of communism? Everyone is equal, all must contribute etc? The theory sounds great, it’s when the greedy and immoral get involved it goes wrong..
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I think we should all complete the questionaire rather than ignore it and watch it steam roller right through – just like the letting fee ban. NAEA – stand up right now
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‘NAEA – stand up right now’?
Never gonna happen.
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FFS!
This is becoming ridiculous, anyone know the rules for changing to ‘Charity’ status?
Minimum wage going up, tax going up, associated costs such as portals, CRM systems going up, professional services going up such as accountancy fees. Electric, Gas, Petrol, Insurance all going up.
More rules and regulations increasing = additional costs.
Fees going down, fees on letting going down, now looking to drop ref fees.
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Yet another headlining grabbing attempt at winning votes, hope they will be banning fees to MP’s and lobby members, or back-handers, in layman’s terms?
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I believe that there should definitely be a cap. £150-200 seems reasonable and fairly standard for passing a case and then having it as a ‘case management fee’ to chase the law firm and get better updates as you have a better relationship with them.
Some of the firms are charging £400-450 and it is ridiculous.
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Woefully incomplete ‘survey’ – and what little is there is woefully unfit for purpose.
It’s like a poor attempt at a Dissertation Questionnaire, which Degree Students seem to need to litter their efforts with, fluffed up with some pretty Excel pie-charts.
Whilst I understand Certus’ call for all to participate, my own thoughts are that in its’ present format, completing this ‘Survey’ will do far more harm than good.
And regardless of the results received, they will steamroller ahead with the (already-written, I have no doubt) Legislation.
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I completed it and when it asked for anything else at the end I stated that it did not offer the option to say that both buyer and seller were informed, and that I have always referred several different solicitors and then those solicitors had to pitch for the business, and I got a small introduction fee from the ‘winner’. I don’t see the problem with that!
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