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Written by rosalind renshaw

Estate agents are blamed today for the soaring cost of moving home, which new research says has risen faster than house prices over the past decade, and now stands at nearly £9,000.

Estate agency fees are the main cause of the 69% rise, the research from Lloyds TSB claims.

In 2001 it cost £5,290 in total to move home, but last year it cost an average of £8,922. There were huge regional variations, with moving costs – calculated for existing home owners moving from one property to another – rising by 132% in the south-east.

The average 69% rise in moving costs is greater than the 64% rise in house prices over the same ten-year period. House-moving costs are currently equivalent to 27% of average full-time earnings, up from a proportion of 22% in 2001.

According to the research out today, all the main components of home-moving costs have gone up. Average Stamp Duty has risen £732, mortgage fees have gone up £770 and estate agency fees have risen by £1,318.
 
The increases in these three components combined accounted for more than three-quarters of the overall rise in moving costs.
 
The research claims that estate agents’ fees, which the research calculates at being 1.8% nationwide, account for the largest share of the average home-moving bill, at 38%. However, this is actually down from 39% ten years ago.

Estate agents’ fees are followed by Stamp Duty (21%, down from 22%). Stamp Duty has been calculated for the purposes of the research using average house prices.

Mortgage arrangement fees have more than trebled over the past decade, and currently account for 12% of the typical bill. Conveyancing also accounts for 12%, up from 6% ten years ago. Home-moving costs account for another 12%, down from 15% a decade ago.
 
Moving costs for first-time buyers are much lower, standing at an average of £3,334 in 2011 – 63% lower than the total for home movers.

This is because the typical first-time buyer does not pay estate agents’ fees and, last year, almost certainly did not pay Stamp Duty. Lloyds warns that the removal of the current Stamp Duty holiday in March will result in a significant increase in costs for many FTBs.
 
The cost of moving catches many people on the hop, says Lloyds. Half earmark savings to cover the costs, and a quarter rely on the equity in their current property to cover the costs – leaving one quarter who fail to budget to the extent that 16% use credit cards.

Suren Thiru, housing economist at Lloyds TSB, said: “With the costs associated with completing a home move in the UK rising substantially over the past decade, the task for those looking to move home has undoubtedly become more challenging. The significant rise in home moving costs is particularly concerning at a time when demand in the UK housing market is weak.”
 
Total costs:

2001:
Estate agent fees: £2,059
Mortgage arrangement: £306
Stamp Duty: £1,144
Conveyancing £572
Removals: £805
Surveyors: £405

2011
Estate agent fees: £3,377
Mortgage arrangement: £1,076
Stamp Duty: £1,876
Conveyancing: £938
Removals: £1,110
Surveyors: £545
 
 

Comments

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    Gaff = one's house (slang)

    Gaffe = social blunder, usually verbal

    • 31 January 2012 17:38 PM
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    Can someone tell me why that was a "gaff"?

    The poster formerly known as Brian has been in rapture ever since I posted it. He's clearly spotted something there that no-one else has. Even though he's been asked many times to state why that comment gives him so much pleasure, he's so overjoyed that he forgets to explain. He'll post it every week though.

    I'd really like to understand what has given him such joy. I'm also confused why he only posts anonymously these days. He's obviously operating at a much higher level...

    • 31 January 2012 15:43 PM
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    Added by rantnrave on 2011-12-07 12:30:56

    100% deposits, not 100% loans. What would happen to UK house prices if it became illegal to buy a property with borrowed money?


    Make him PM! Solve the Euro crisis hes so smart!

    • 31 January 2012 15:19 PM
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    Nice try Brian - As you'll see by the comment on 2012-01-27 22:00:21 I have not disappeared, nor am I Bazza.

    Remember, it's only you that refers to me making a gaff (because you're too dim to have understood the comment). We've had lots of conversations about this but you seem to have the memory of a goldfish. I'm impressed you manage to add the 10 and 4 with each post you make.

    • 30 January 2012 20:57 PM
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    All mouth and no trousers!

    • 30 January 2012 16:56 PM
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    Shop around for cheaper stamp duty. Market forces at work.

    • 30 January 2012 16:08 PM
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    Not been on here for a while but all seems similar, posters gets found out, changes name to annoy you guys at the sharpe end,- lets guess who Bazza is, rantnrave perhaps , hes seem to gone after his major gaff?

    • 30 January 2012 14:25 PM
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    Bazza, if you do not pay attention you will go through life appearing to be thick.

    For you and your other remedial mates.

    Property prices are determined by supply and demand. Those that do well at school or those that are thick but can play football can afford to pay more than blokes with opinions but little understanding. If wages go up or we have a labour administration that gives away lots of cheap credit, property prices rise. If you hadn't been jerking off in basic economics you would understand why the 1.5% charged by Estate Agents is a relative cost and therefore not more expensive.

    • 30 January 2012 06:32 AM
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    Bazza; just to set things in context ---

    Tell us, how do you get paid? Do you work for an employer? If so, do you get paid weekly, monthly on a fixed salary?

    Do you work Mon-Fri?

    • 28 January 2012 22:59 PM
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    Since average prices are used the increase in house prices over the last 12 years or so have automatically increased the agent fee part. The %age should be about the same. The mortgage fees have trebled so why is it all EA's fault that moving costs have risen? Banks charge anything up to £200 for those who go overdrawn without approval and £960 odd thousand quid is paid to a loser at the head of the RBS.

    They should go back to banking and not messing around in a business they do not understand.

    TSB are bankers but for the benefit of this research I think the first letter of the word banker is not quite correct!

    • 28 January 2012 17:03 PM
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    Business & profit.

    The idea is to get maximum profit from you clients, not by ripping them off [unethical] but by giving the best service you can for the maximum yield.[ethical].

    Historically pricing in the UK has been by market forces, or as we say ‘what the market will bear’ meaning what customers are prepared to pay. If customers believe a product or service is too expensive, they will not use it or buy it.

    The only exceptions are the monopolies [price fixing cartels,] such as banks and energy providers, who fix prices behind closed doors. As we are forced to use these services they charge what they damned well like and we have to swallow it.

    EAs are not a monopoly, and we are not a price fixing cartel, obviously or this thread would not exist.

    No one has to use an EA to sell a property, they choose to because we do all the work for them.

    It’s called freedom of choice, if a vendor does not like the fees an agent charges, then they can use someone else, just as an Agent can choose what his fee structure is without having to justifying it to you or anyone else apart from the vendor.

    OH you will love this example from me and my big shot mouth, , but I love my garden but I don’t enjoy tending it, so I pay a gardener £25 per hour to tend it for me, I can get a cheaper one, but I like him and I like his work, so I am willing to pay more for a service I prefer.

    Taker the £750,000 property you keep banging on about;
    If a vendor is willing to pay 5% to an EA to sell it and is happy with the service and sale, result happy vendor and happy EA [£37,500 happy]. So its win, win, with both parties satisfied.

    The market changes:
    Now the vendor is willing to pay 3% . Again sale completed, happy vendor happy EA [£22,500 happy], again Win Win.

    Another change;
    Now the vendor is willing to pay 1%. Once again sale completed, happy vendor happy EA [£7,500 happy], again Win Win.


    2012 The bankers have liquefied their assets leaving the world short of cash, everyone is tightening their belts.
    Now the vendor is willing to pay a fixed fee of £800, this time some EAs with single offices & low overheads can make a profit from this, some larger independents cannot or will break even (remember a lot of independents are getting by on 1 sale a month or less at present, the large chains turn over so much business they can still make a profit on the quantity [the pile ‘em high sell ‘em cheap method]. Result sale goes through happy vendor, some happy EAs, a lot of EAs cease trading as their business is no longer profitable.

    So in the ‘good times we make shedloads of cash, our bank managers band accountants are happy, the public is happy with the service as they keep retuning and paying. In the bad time we restructure, reset our profit forecasts and tighten our belts, if we see the business is no longer finically viable we get out, before it drags us down.

    Now its Bazzatime.
    Vendor offers 5%, Bazza says no way I cannot justify that fee, I don’t do enough work to earn it. Just give me £1000 and I will be happy!

    • 28 January 2012 16:48 PM
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    "Just want to focus on this a little closer Bazza or you will claim that your question hasn't been answered. "

    That was my post by the way. Not sure why my name didn't show up! Oh well.

    • 28 January 2012 16:12 PM
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    "that we should discount our fee right down and charge the vendor the cost of a mere phone call and that we don’t deserve our fee at all. Well I think I can speak for most agents on this site when I say that in those circumstances, we are more than justified in arguing that we should charge the vendor MORE!!! "

    What he just said! :-) LoL

    • 28 January 2012 16:10 PM
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    Just want to focus on this a little closer Bazza or you will claim that your question hasn't been answered.

    ---- THE SCENARIO ----
    Okay you have 2 properties which are extremely similar in every way (same size, layout, features, number of rooms, etc.) but with one crucial difference, one of them is in a highly sought after location and one of them is not, which is reflected by a difference in their house prices.

    ---- THE QUESTION ----
    Now, pray tell, what extra costs do you incur in selling the more highly priced property:
    (1) that are only related directly to the sale of the property with the higher house price
    (2) and how do any of these costs match up to the extra fee (in pounds) that occur as a result of your percentage fee

    ---- THE ANSWER ----
    (1) The clue is in the Scenario. "which is reflected by a difference in their house prices." We need to convince buyers to spend more money for the same size house in the better area! Sure they may like the area, but they need to pay more for the same size house. The number of times I hear vendors saying that "You should have no problem selling this as the area is really sought after, so lets put an extra £10k on the asking price" !!! Doh,

    (2) It's going to take longer to sell because there are less buyers around the higher the asking price! If it takes longer, that's more brochures, more phone calls, more newspaper adverts and that extra £10,000 only earns us an extra £150 over the cheaper house. It also nets us a loss if the vendor can't sell! Remember the old saying "Time is money".

    The main point is that if a house is cheaper, there are many more buyers looking for cheap houses than there are buyers looking at £500k houses. Less buyers often means longer on the market unless it is priced low to sell and then agents will adjust their fees to allow for this.

    Hope this answers your question.

    • 28 January 2012 16:05 PM
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    @Bazza

    Let me try to answer your question a different way - parhaps even the way you want by the way you’ve angled your question.

    A percentage fee probably doesn't completely reflect the work done on a property. BUT WHY SHOULD IT?

    At the end of the day our industry is such that it incredibly difficult to assign or bill individual clients for all the work done to sell their home. In many cases an agent may call a buyer and discuss several homes with them - should the agent bill each vendor for the phone call or assign a number of seconds from the call to each vendor?

    Further, agents do lots of work which doesn't directly benefit any client, but can indirectly lead to a sale, e.g. I can tout or leaflet drop an area for more business, it’s not going to sell a house but it's work which may help me win a listing, which can then create a lead, which may then be converted to a sale on an entirely different property. Should that vendor be billed for work which helped me list a different house? There are many more examples of this, and I could go on for ages.

    It’s all very well saying that we shouldn’t charge a percentage fee because it’s not fair on those selling more expensive houses and doesn’t reflect the work, but equally it’s unfair on those selling cheaper houses if we charge a flat fee to all because they can end up paying a far greater proportion of their house value for our service.

    So what then? A graduated flat fee scale? Isn’t that just akin to charging a percentage anyway? In reality you need to look at our titles – we are estate AGENTS, like many talent AGENTS we earn a commission based on the figure that our client earns – IRRESPECTIVE OF THE WORK WE HAVE DONE. Like many estate AGENTS who charge more when they find a buyer who can afford more, many recruitment AGENTS typically charge a higher fee to find an employee of a higher calibre – employers wouldn’t expect different.

    Finally, what happens on those occasions when due to all our previous hard work and effort, when we have taken the time to build up an outstanding reputation in our area, when we have diligently worked to build up a comprehensive database of buyers and have listed a property at the correct price, which sells on its first viewing, after a day and following one phone call? No doubt you will suggest that as we’ve not done “much work”, that we should discount our fee right down and charge the vendor the cost of a mere phone call and that we don’t deserve our fee at all. Well I think I can speak for most agents on this site when I say that in those circumstances, we are more than justified in arguing that we should charge the vendor MORE!!!

    • 28 January 2012 15:49 PM
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    @ Bazza

    Okay the first thing to understand is that percentage charges can been seen in a similar way to the way the council calculates council tax. I.e. Band D is calculated as 100%, or 9/9th's and Band C is less at 8/9th's, band B is 7/9th's and so on. Band E goes up to 11/9th's and Band F is 13/9th's and so on.

    We calculate the cost of selling 6-mid value (£160k) properties each month and know that each sale needs to net us £2400 per sale or 1.5%.

    Okay so let's think of it as £2400 is 9/9th's and how much extra will it cost us to sell a £250k property. Lets call it £800. so we should charge £3200 to cover our extra costs. Now if we still charge 1.5%, this equates to £3750 and we have just made a bigger profit of £550. Great, I'm really pleased, however, in reality most agents will negotiate their fees slightly on the bigger more expensive properties and we could list a £250k property for 1.3% meaning that we would only charge £3250 and make an extra profit of £50, no big deal. Of course we make a loss if we don't sell it!!!

    Okay, I can already hear you saying, how can you justify an extra £800 for the more expensive property. An expensive property will want a quarter page in the paper instead of the small boxes we normally give, That's an extra £47 a go. Four of those is already just under £200. Then they will want a premium display and that's another £50. Then all the viewings will need to be accompanied. We have an expensive property 12-miles from here than needs accompanying. So far over the last 6-months, we have done 20-viewings. That's 480-miles of travelling! A tank of fuel or two so call it £100 in fuel. Expensive properties have more expensive brochures with multiple pages on expensive cream paper and matching envelopes. Including the laser toner ink, the postage we calculate the cost of each brochure to be £3.55 a go. Send out 100-brochures to each buyer that we come across and that's another £355. We are already up to £700 and more time on the market means more phone calls with buyers and an extra £100 in phone calls or even more as everyone uses a mobile these days.
    I haven't calculated any time in all this, but I should calculate the extra time because less expensive properties don't get all their viewings accompanied!!!

    Now you make a comment about two identical properties at the same price, yet one is in a sought after area! Well if they are the same price, one will be bigger or better than the smaller or scruffier property in the better area! Better area's get stronger prices, so the two properties cannot be identical in terms of ease of selling! Sure it's the same price, but it's smaller and probably needs work.

    If someone is giving us a great house in a great place and is willing to let it go below market value, then we will discount our fees, because it should be easier and faster to sell.

    Agents, like any business needs to weigh up the costs of selling, the likelyhood of a sale taking place and the risk of failure. This boils down to location, condition, additional costs (I.e. Extra newspaper/ Brochure costs etc.) and ultimately the asking price because it's bad enough the property being a bigger more expensive with less buyers around at that end of the market, but if they want to stick an extra £30k on the asking price, it's gonna take even longer to sell.

    If I had to go to fixed fees, little would change. Instead of asking 1.5%, I would ask £2400 plus £800 for a bigger house or minus £800 for a 2-bed flat. Geddit ?

    • 28 January 2012 15:42 PM
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    Ah so now we have an answer from Chris as well as Mike. A seemingly thorough answer..... but completely avoiding answering the actual question!!

    Although I must say the most entertaining thing you say also happens to be the very first thing you say: "Allow me to explain why percentage costs are better than fixed fees and why a more expensive property should attract more expensive fees."

    BETTER?? Better for who?? Better for a vendor or better for your grubby little mits?? I would just love to see you pitching it to a vendor with a higher house price that it was BETTER for them!

    When are you guys going to get it? Look, I'm going to break this down really really slowly and into small pieces to help you all understand the question and prevent you from avoiding it because so far you hidden percentage lovers seem to be doing the school exam equivalent of not reading the question and instead writing an answer to a question you would have preferred to face.

    ---- THE SCENARIO ----
    Okay you have 2 properties which are extremely similar in every way (same size, layout, features, number of rooms, etc.) but with one crucial difference, one of them is in a highly sought after location and one of them is not, which is reflected by a difference in their house prices.

    ---- THE QUESTION ----
    Now, pray tell, what extra costs do you incur in selling the more highly priced property:
    (1) that are only related directly to the sale of the property with the higher house price
    (2) and how do any of these costs match up to the extra fee (in pounds) that occur as a result of your percentage fee

    That's the question percentage-folks! To help you I'll address a few of the mistakes that I've been seeing so far in your struggle to provide concise answers....

    Okay Ray Evans at 17:00 please rework your answer to be specific. Don't just say that there is a "difference in the amount of work, preparation and presentation" or "Expectations vary greatly and it is not as simple as you may think". Can we have details from you of the actual differences in work involved and how any extra work you can think up is matched up to the extortionate extra in fees (in pounds). Come on it should have been easy for you especially seeing as you chose such an extreme example as the difference between a £1million house and a £100k flat. Please feel free to try your hand at dealing with the above scenario.

    Now Chris you did better because you said that "Brochures need to be a bit more upmarket as do newspaper adverts. Typically they want Premium Displays on Rightmove". Credit where credit's due, that's a solid start BUT you let yourself down by not justifying how you could in a million years hope to match up those costs to extortionate extra that the vendor with a higher priced property gets charged. Are you printing those brochures on gold leaf paper???

    Also Chris you say "If agents were forced to go to fixed fees, they would all want the same quick selling properties and avoid the other stuff". Do you really expect anyone to believe that if there is very stiff competition in your area for the quick-sellers that you will turn down extra business???

    Now for some other general points....

    Please, if you must insist on banging on about how it adds to your costs when properties take longer to sell then at least say specifically how and why this is the case rather than simply stating it as fact. When you do this don't forget the golden rules though, you know, stick to the extra costs related to those longer sales and how they have a bearing on the extra fee (in pounds) charged to the vendor.

    By the way it's only very intellectually challenged people who will think that you are constantly typing away, on the phone or running around dealing with their case for the full duration if their house takes 2 years to sell. Realistically you will only be intermittently renewing adverts and tweaking listings slightly because the average property's specifics won't be changing much over that time. If you must bring out that old excuse of a higher number of viewings adding costs then please also explain how your percentage fee accommodates and is fair when vendors do their own viewings. Also explain how extra viewings can possibly add thousands in extra costs because I wasn't aware that petrol was that expensive yet or that hourly staff rates were that high.

    Oh enough of all the talk about non-specific-to-the-sale overheads. I do understand that there are overheads which need to be accounted for in the price of the service but if I own a more highly priced property I don't want to be the one paying for your lavish Christmas Dinner fund or any other surpluses to requirement like unneeded extra cars. Happy Chappy said it better than I can when he posted "It is the responsibility of the EA to keep these costs to minimum these expenses may add no value to the Vendor" in the EAT article "One in five agents 'won't reveal their fees'".

    Look, I'm mindful that what I'm saying might come across as hard hitting but it's not my intention to victimise anyone. I only want to draw attention to the folly of having a percentage fee and refusing to tell vendors upfront what it is before you go out to see them in person. In every business sector it is proven that customers value transparency, simplicity, good value and a low price. Given time if you don't offer that then maybe someone else will - that's all.

    Bazza - out!

    • 28 January 2012 10:07 AM
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    @ Bazza
    Allow me to explain why percentage costs are better than fixed fees and why a more expensive property should attract more expensive fees.

    Firstly where we are in the Midlands a 1.5% fee works out to be around £2400 per sale on a £160k property. (Typical 3-bed detached family house) If we sell a handful of these properties per month (Average sale number for an average size agent) it should cover the costs of an office, a company car, 2 or 3 staff and all the advertising needed to be effective. Plus a little profit to cover the slow times of the year later and stay in business.

    When we are asked to sell a £250k property, it's going to take longer to sell. There are fewer buyers around and at £250k, buyers are not just looking for a number of bedrooms, they are making more of a lifestyle choice.

    Brochures need to be a bit more upmarket as do newspaper adverts. Typically they want Premium Displays on Rightmove, all viewings need to be accompanied and don't forget this tends to be over a longer period, so significantly more cost.

    A £500k property in this area could take more than a year to sell. There simply isn't the demand in this region and there comes a point where you don't want them if all you can get is a £2400 fee! Sod that, too much hassle. I'd rather just sell the cheapo £160k houses as these sell much better.

    We agreed to sell a factory for 0.5%. We sold it for £3-million and we will make a cool £15k, but it took us a year to sell it and the sale was structured based on full planning to be granted to knock it down and build 120-homes. That sale was agreed 18-months ago and we are still waiting for planning to go through. Meanwhile we continue to visit the site each week to check no one is damaging it/ living there. During that 2.5-year period and the thousands of hours wasted, we could have sold around 30-properties (Same time and cost equivalent) and made £72,000!

    Okay, so how can agents link their fees to a percentage? If property prices rise, does the cost of selling them rise at the same rate? Well it can do. When property prices increase, so does rents (This is based on the cost of covering loans by investors) and therefore we found that when our 5-year lease on the office came up for renewal, the rent virtually doubled for each year on the new lease!!

    Our rent here in the Midlands will be a fraction of the cost of rent in London, but then they also have bigger fees to cover their costs from more expensive properties!

    Our advertising with Rightmove has been rising by 22% year on year, yet property prices haven't risen by 22% last year or the year before, or before that!! Then throw into the mix all these new costs to agents. The Property Ombudsman fees, the Anti Money Laundering register, the Data Protection Commission, Consumer Credit Licence, petrol prices, gas and electricity prices etc.
    Throw in vendor demands to use Zoopla and Prime Location as well as Rightmove, the ever reducing number of sale transactions and agents are going out of business.

    If I list a property below market value, (I.e. £160k instead of £170k) it should sell quite quickly for full asking price or close to it and I would have made an easy £2400 with lots of profit to cover my office costs, but the vendor would not be best pleased.

    If I listed it at the correct price or slightly higher, Say £170k) it's going to take longer, maybe an extra 3-months and cost me much more, but the vendor could make an extra £5k. That £5000 extra costs the vendor only £75 in extra fees from me, but those 3-extra months of marketing cost me more than £75 in marketing costs.

    If agents were forced to go to fixed fees, they would all want the same quick selling properties and avoid the other stuff.

    What I hate are agents that have sliding scale fees that are set from the asking price at the time the property goes onto the market! They are normally very high percentages (I.e. 2.25%) converted into a price so as to make it hard for the vendor's to understand. (I.e. £3700 for properties listed between £160k & £165k. Then when the vendor eventually sells at £150k, he still has to pay the same £3700! Equivalent to 2.47%!! The agent in this case is not trying to get the vendor the best possible price, but is happy to rip them off with high fees.

    • 28 January 2012 00:06 AM
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    Since you asked so nicely Jonnie, the UK's rate of general inflation, as measured by the Retail Price Index increased by about a third between 2001 to 2011 anyway.

    Taking this into consideration, the rises look less severe:
    EA fees up 32% above inflation
    Mort fees up 218% " "
    Stamp duty up 31% " "
    Conv up 31% " "
    Removals up 5% " "
    Surveyors up 3% " "

    The rise for removals and surveyors is negligible when inflation is taken into account. Interesting to note that the other costs (except mortgage fees) are reported to have risen by a third above inflation at a time when transactions in the housing market are down by an equal %.

    I'm with the EA industry here though (!) The UK's largest mortgage provider has put out research which clearly shows that the biggest increase in costs around buying a house are to do with their own mortgage fees, and then they point the figure at EAs!

    It should be stated though that these costs are not so much to do with moving, but buying. Moving from one rental to another normally involves far far less cost.

    • 27 January 2012 22:00 PM
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    Yes Mike yes you have rattled my cage and I'm singling you out purely because you seem to have the largest number of words to say in defence of your fee system but without any robust argument anywhere in there.

    It hasn't escaped my attention that your original posts extolled the virtues of your percentage fee which you couldn't possibly reveal to the vendor until you'd been out to visit them. However in the face of very direct questions from me and some of the other posters on here you seem to have become progressively quieter in your justifications. Do I really need to ask again and again how you could justify a £4500 extra fee between a £750k and £300k property? Oh I get it, I should have realised that was a "no comment" from you, sorry my bad. LOL

    Also what's with the I'm big and you're small act? You say "With respect, it seems you and I are at different ends of the market" but where is the respect because what relevance does that have to this discussion let alone why you would assume this to be the case.

    The real concern Mike is that on the one hand you are acting like the friend to small independent agents and are championing their struggle against the tyranny of the "megaportals" and "large chains" then the next minute you're on the other side of the fence playing the role of the big global corporate man raking in so much revenue that as you say you have "nothing to fear from them". This seems quite slippery of you Mike because which is it to be?

    At 15:88 you said "Those who stand to gain are the megaportals, some who are already setting up price comparison sites for agents, not to benefit customers or agents, but so they can see by exactly how much to undercut us all with their fixed rate policy to literally take over the industry." Do you see what you did there? You said "undercut us" which implies that you're including yourself in there.

    But then in your last post at 17:41 you say "Fear the megaportals, LOL.
    With respect, it seems you and I are at different ends of the market. Our global revenue far exceeds that of all the megaportals combined. We have nothing to fear from them". Here you are trying to play the big global corporate man.

    The problem here is that when you are acting like a big shot you are aligning yourself with that very same big corporate threat which plagues most of the small independents on here. So it seems rather disingenuous for you to claim to be concerned about the plight of small businesses if you're one of the "heartless corporations" using your economies of scale to compete them out of the water. So I'm curious now, which one are you? Are you a big global corporate man who comes on here to get a kick out of all the praise you get when you say the things that independents want to hear or are you (as you put it) one of "us"???

    Oh and so I'm promoting housenetwork.co.uk now am I, what because I mentioned them twice (and now 3 times)?? Well I've noticed you have mentioned Rightmove many more times so can I make the same assumption about you?? That would be a bit silly right? You nitwit, the housenetwork was in a table linked to the EAT article "Private sellers told how to get their properties on to Rightmove", doh!

    And Mike, when you've finished pretending to be industry Saint Mike from your corporate global cloud on high looking down upon the small independents then maybe you might get back to answering that question. You know, just in case you've forgotten it: if the difference in house price between 2 properties was purely down to the different locations with both being very similar in size, layout, and number of rooms what extra costs do you incur that correspond to the extra fee (in pounds) charged to the vendor with the higher house price?

    Bazza - out!

    • 27 January 2012 20:04 PM
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    Hmmmmm, Still fuming

    Cost of moving going up or cost of selling?
    Suren Thiru needs a dictionary.

    Who forces people to use EAs, is it compulsory?
    The way it is to use a bank, try asking an employer to pay in cash, nope you must have a bank account.

    We broker introductions for DIYers, for a small fee, the take up has remained stable for years, why when it can save a vendor thousands in EA fees?

    When banks reduce their punitive levys on small business, and reduce some of the ridiculous charges foisted on the public, then they may lecture others, but after pulling off the biggest scam in this planets history at the cost of thousands of lives, shattered futures, bankrupt businesses and destroyed economies I think they had just better shut up.

    And anyone who wants to back this article, remember where did this recession come from, business slow why?

    Oh it all the fault of those naughty greedy EAs

    • 27 January 2012 19:30 PM
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    Bazza'

    Wow seems ive rattled your cage, that's 2 threads you have slated me on.

    I am getting a little suspicious as in both instances you are promoting the housenetwork.co.uk,. I take as an example of the imminent future?

    Maybe we are dinosaurs, its what a few hundred years of involvement in land and property do to you, But we are still here, and not going anywhere!

    Fear the megaportals, LOL.
    With respect, it seems you and I are at different ends of the market. Our global revenue far exceeds that of all the megaportals combined. We have nothing to fear from them, its all the independent EAs who do.

    I am interested in the future Of EA industry in the UK, If most of the independents disappear it will be bad for business, the consumer [who would then be at at the mercy of the new online agencies. Take a look at how Stagecoach undercut its rivals to put them out of business, then jacked up prices when it was the only one left.], and the economy.
    Small business is one of the foundations of a stable society and we cannot afford to lose sector after sector to these heartless corporations run by faceless psycho-bankers, to whom only money and power matter, and sod humanity, and the cost in human terms.

    I welcome change for the betterment of the industry, but rail against these leeches, not for me but for the industry.

    • 27 January 2012 17:41 PM
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    Bazza on 2012-01-27 17:00:38

    You seem to have little understanding of the difference in the amount of work, preparation and presentation required for a £1,000,000+ property and a
    £100,000 flat. Expectations vary greatly and it is not as simple as you may think
    That is not to say the linear percentage fee is competely
    satisfactory but a variable fee certainly is.

    • 27 January 2012 17:34 PM
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    'want ranty': SO pleased to learn that you are not an Estate Agent. Restored my faith immediately.

    So now I wonders what you are.

    You mustn't be an HPCer - why cr@p in your own nest?

    I'm more than a little perplexed by the whole thing. UNLESS...

    I wasn't aware that getting ones' rocks off being a berk WAS a profession - but maybe it is. You have cleared up that matter for me. Thank you. By the way - you are clearly an award-winner at it.

    Here's a question for you. Are you able to type AND 'self-pleasure' at the same time?

    If not - go back to the job in hand.

    That way, you bother no-one else and it keeps you abused.

    Oh, sorry - I meant amused. Slip of the wrist. (But of course you know all about those...)

    • 27 January 2012 17:32 PM
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    There must be some DAMN thing wrong with those people on here who think that because their percentage hasn't changed drastically over the years that somehow the amount in pounds hasn't changed. What the hell??

    And why being so childish about Stamp Duty and morgage fees? I'm not saying that I love them but what have they got to do with the completely separate issue of whether estate agent's fees are too high. Also mortgage fees have TRIPLED, oooooh so that must mean that now they're higher than estate agent fees...... oh wait, no they were much lower to begin with so in fact they're still only 12% of the cost compared with 38% for estate agency fees, DOH!

    To all those people determined to protect their percentage based status quo I'll let you in on a little secret shall I, people in the real world prefer to think in terms of pounds sterling, not percentage!

    Ahhhh Mike, when you say things like "Notice how many angles the pressure is coming from" and "the writing is on the wall" you are the epitome of all that is the percentage based fee and you seem suitably paranoid. Your fear of the megaportals is misplaced because long before they become your competitor you will have trouble from the small independent fixed fee agents.

    Take for instance the housenetwork.co.uk which seems to have been quite popular with the punters and they do quote a flat fee. Take a look and see, their fee (in pounds, not percentage) is at the top of every page on their site and surprise surprise they do have a few £million+ properties on Rightmove. If I had a £1million property I would never instruct you, I'd go to them!! That is unless you can reply telling me what you'd do for me for all that extra money that I'd pay under your crushing percentage regime.

    In fact do you know what Mike you old dinosaur you seem so averse to change that you probably should continue on with your percentage because for the moment it will continue to (over)pay in the short term. But the minute that the younger dynamic fixed fee agents have a solid presence in all postcodes then you will be bang in trouble. That's because a £750k property is almost never going to cost an agent £4500 more to sell than a £300k!! (That's based on Big Ted's 1% calculation, many thanks for that).

    In fact how could you even justify any extra fee (in pounds, not percentage) if the difference in house price between 2 properties was purely down to the different locations with both being very similar in size, layout, and number of rooms. No I'm afraid this percentage malarkey will only remain the preserve of a small minority agents who represent the absolute cream of the crop of EAs and are able to convince vendors that they offer something really substantial for the extra expense. In that instance those estate agents might even actually deserve it.

    • 27 January 2012 17:00 PM
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    Those who stand to gain are the megaportals, some who are already setting up price comparison sites for agents, not to benefit customers or agents, but so they can see by exactly how much to undercut us all with their fixed rate policy to literally take over the industry.

    Notice how many angles the pressure is coming from, and which bodies are putting out these reports.

    Who stands to profit?

    Who stands to lose?

    • 27 January 2012 15:18 PM
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    The large chains may be able to adopt to this system, but the small businessman cannot, unless he is dealing mostly in high value properties, which generates enough profit to: Pay his bills, pay his staff, take a decent profit, and put enough aside to subsidise those slow months.

    • 27 January 2012 15:18 PM
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    OK that dident work, para by para then

    Doing this in these recessionary times will drive many independents out of business, you will find yourselves shaving down that 1% to gain business [if you dispute this, go see your accountant and ask him for the next 3 years projections based on a 1% commission].

    • 27 January 2012 15:17 PM
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    Just noted that half my post is missing [you know i cannot say anything in under 1000 words]

    So with your forbearance I shall repost.



    My fellow property professionals.
    Can you see the writing on the wall?

    It is self evident that this this load of warped garbage, is only being released as part of the concerted effort of certain parties to force all EAs to adopt a fixed price policy, [the figure being mooted behind closed doors is 1%].

    Doing this in these recessionary times will drive many independents out of business, you will find yourselves shaving down that 1% to gain business [if you dispute this, go see your accountant and ask him for the next 3 years projections based on

    • 27 January 2012 15:15 PM
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    You are safe PeeBee would not stoop so low, not sure you can call agency a profession can you chum?

    • 27 January 2012 14:55 PM
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    To the previous poster...

    Give me a discussion with rant over being force-fed your unadulterated, childish MDT anyday, chum.

    It pains me to think that you may actually be a 'professional' Estate Agent.

    You do your colleagues in industry no favours whatsoever.

    • 27 January 2012 14:41 PM
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    Unless you are a big a prune as ranty why would you ever want him, bit like saying you want a dose of clap!

    • 27 January 2012 13:13 PM
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    Where on earth is rantnrave when you need him?

    Come on rant – get on here and explain the inflation thing you use with house prices so we can all get on with our lunch break.

    Jonnie

    • 27 January 2012 12:54 PM
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    HSBC and Countrywide- anyone else any take on this carve up? Buyers have to use a small CW panel who then get a referral fee at cost to the buyer and little choice? So we feed CW’s coffers, great.

    Let’s all boycott their products?

    • 27 January 2012 12:24 PM
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    My fellow property professionals.
    Can you see the writing on the wall?

    It is self evident that this this load of warped garbage, is only being released as part of the concerted effort of certain parties to force all EAs to adopt a fixed price policy, [the figure being mooted behind closed doors is max 1%].

    Doing this in these recessionary times will drive many independents out of business, you will find yourselves shaving down that 1% to gain business [if you dispute this, go see your accountant and ask him for the next 3 years projections based on

    • 27 January 2012 12:21 PM
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    Ace, small point but a mortgage valuation is NOT a survey, as I imagine you must know. The survey fee levels quoted are apparently from Lloyds TSB own service for level 2 reports & would include VAT & an admin fee.
    But the survey fee increase over 10 years is only 35%, compared to 64% for conveyancing & agency..
    OK the report may be regarded as rubbish by some sectors, but it certainly confirms what most surveyors know - their fees are too low. Which is entirely in their own hands to rectify.

    • 27 January 2012 12:16 PM
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    Bankers accusing EAs of profiteering!

    Dont know whether to laugh or cry.

    • 27 January 2012 12:16 PM
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    HD2

    Nope not in Huddersfield, and we charge a bit further north than 1%

    • 27 January 2012 11:30 AM
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    Its all rightmove's fault.

    • 27 January 2012 11:15 AM
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    The one area that has increased with regards the house buying process is mortgage arrangement fees. You can pay up to 5% of the mortgage advance.This is an area that needs regulating also redemption fees.The lenders dance around any so called directives from government or the FSA.. The lenders seem to be bullet proof?

    • 27 January 2012 10:49 AM
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    This is rubbish.

    I consider myself lucky if I can get a fee of £1,300 let alone an increase of that amount.

    Also Survey fees £500 + what a joke. I have just been out to do 2 BS vals (one of admittedly a driveby) but I will be lucky to see £150 for the pair.

    • 27 January 2012 10:45 AM
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    @ property portal watch
    I never knew Allagents even had a property portal let alone a Facebook app. Im impressed indeed.It even allows you to draw a search!

    • 27 January 2012 10:43 AM
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    So the increases between the figures are;

    EA fees up 65%
    Mort fees up 251%
    Stamp duty up 64%
    Conv up 64%
    Removals up 38%
    Surveyors up 35%

    ...and it's all the EAs' fault? When their fees have merely gone up in line with SD and Conveyancing?

    • 27 January 2012 10:39 AM
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    What a load of rubbish, the only thing not to go up is agent fee's!!

    • 27 January 2012 10:23 AM
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    Fun Boy Agent -

    "Pass a law that all agents must charge 'up front' fees to EVERYONE putting a property on the market, make a maximum fee of 1%. "

    So if the seller can't afford the upfront fee, they can't put their property on the market?

    Have you any idea how many sellers out there are reluctant or unable to pay upfront fees, and will happily sign up to a no-sale no-fee deal, payable at conclusion, as they need the proceeds of the house sale to pay the fees.....?

    • 27 January 2012 10:17 AM
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    A very accurate and informative article. Nice to see statistics properly used for the purpose they were intended. I am especially enlightened to see that stamp duty remains so low. I had previously assumed the figure to be nearer £10,000, but then, I don't live in Carlisle.

    • 27 January 2012 10:05 AM
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    Northwest London Agent: 'I cannot wait for all decent professional agents to one day be licensed directly by their local authority ...'

    OHHH PEEERLEEEASE - not the Local Authority. Anyone of them. Couldn't the local WI do it?

    I have had the misfortune of dealing with people at my Local Authority for some years now - a bigger bunch of muppets and half-wits would be hard to assemble.

    • 27 January 2012 09:41 AM
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    We taxpayers own 43.4% of Lloyds TSB, so I would like Suren Thiru sacked for being a bloody idiot. You agree?

    Why are banks still employing these parasites?

    • 27 January 2012 09:38 AM
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    "Estate agency fees are the main cause of the 69% rise" but "...at 38% [of the total cost]. However, this is actually down from 39% ten years ago."

    Lies, damn lies and statistics!

    • 27 January 2012 09:33 AM
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    I cannot wait for all decent professional agents to one day be licensed directly by their local authority so we can get rid of all the dross and cowboys from the industry and then start to charge PROPER fees like the US agents and most of Europe! Historically we are the lowest paid agents in the whole of europe and hopefully this will stop one day.

    Why can't we be regulated and qualified to do everything one day, finance, conveyancing, surveys the lot like the US? Because the old boys in stripey tousers will never allow it aka RICS and the Law Society until then we will always have jobs for the boys.

    • 27 January 2012 09:28 AM
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    Totally agree bigG. A total non-story.
    Regional differences in the cost of moving, hummm, couldn't possibly be due to regional house price differences could it?
    Come on EAT, let's have something of substance.

    • 27 January 2012 09:27 AM
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    Assuming HD is in Huddersfield where most agents are quoting 1% down to 0.5% in order to kill their P&L's and not be able to invest in a better service, in the worst market in living memory.

    These agents cannot be blamed for the rising cost of moving just the lowering of agency service!!!!!!

    • 27 January 2012 09:26 AM
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    Christ we wonder why the banks all went tits up. If they predict their own business using the same pool of thinking then god help us all.

    • 27 January 2012 09:20 AM
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    WTF!! WHEN AGENTS FEES ARE PERCENTAGE BASED AND PRICES RISE OF COURSE AGENTS FEES WILL INCREASE; MY GOLDFISH COULD HAVE TOLD YOU THAT! THIS ARTICLE SHOULD NEVER HAVE EVEN BEEN GIVEN THE TIME OF DAY LET ALONE BE PRINTED............Rosalind it needs challenging not just printing!

    • 27 January 2012 09:11 AM
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    @HD bit like petrol duty.

    We all complain about the cost at the pump, but for every £1 you pay HMRC get most of it.

    BP (or equivalent) have to find it, get it out of the ground, transport it, refine it, transport it again and pay for the forecourt, lighting insurance & wages.

    They make a profit on the 17pence the government leaves them after fuel duty and VAT.

    On a price of £1.42 per litre for diesel the petrol company will make about 2p profit per litre.

    That's why they all have expensive shops in them - that's how they actually make a profit - because you'll pay 20% more than you should for a Mars Bar.

    Bloody Government - let's string 'em up!

    ;-)

    • 27 January 2012 09:10 AM
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    If anyone had any doubt that stupid inaccurate comments were reducing TSB (who were heavily involved in creating the financial mess) have proved that rubbish is still alive and well.

    Fun Boy Agent on 2012-01-27 08:22:31

    In my view, wanting and encourageing any government to introduce bans of the kind suggested always ends in tears in a capitalist society and affects freedoms of personal action for the general population. We are not China or Russia - yet! ;>)

    • 27 January 2012 09:09 AM
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    its a mystery... ea fees are a % of house prices....acording to the nationwide, since 2001 house prices have doubled ....no still cant see it ...

    • 27 January 2012 09:08 AM
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    If I was to re write this headline it would read' governemnt blamed for increase cost in moving'.

    I can only speak for our area we cover, but for the average price we sell homes for, the satmp duty works out to be roughly double that, and we are by no means a cheap agent.

    Stamp duty is not a bad bit of money for doing nothing

    • 27 January 2012 08:58 AM
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    I thought the Government said abolishing HIPS would solve this!

    • 27 January 2012 08:56 AM
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    what a load of crap, this story is a waste of pixels on my screen.

    ea fees risen with prop prices
    mortgage fees trebled
    conveyancing doubled

    Suren Thiru you sure are thick

    • 27 January 2012 08:55 AM
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    And I'd venture to suggest that the increase in Conveyancing Costs are reflected purely in the balance sheets of Agents and Introducers

    • 27 January 2012 08:54 AM
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    Lloyds TSB fail to highlight that in %ge terms there has been an over 300% increase in mortgage arrangement fees. Hmmm.

    • 27 January 2012 08:54 AM
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    I think Vendors should shop around for cheaper stamp duty.

    EA fees 1,8% average? Complete phooey! A vendor would only pay that much if they were stupid, devoid of negotiating skills themselves or conned into using a Corporate.

    Yes EA fees are expensive, but that is a result of the 'no sale, no fee' business model.

    Simple solution, get our old mate Grant involved. Legislation. Pass a law that all agents must charge 'up front' fees to EVERYONE putting a property on the market, make a maximum fee of 1%. Then agents can discount down from this maximum or be the very best at the maximum level.

    Like a wage cap with footballers.

    Now there is a funny thought.

    • 27 January 2012 08:22 AM
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    It beggars belief that Suren Thiru has even got a job?

    How can he/she comment on an industry that they clearly do not understand.

    The average cost of selling a house has not changed by more than .01% in the 20+ years I have been in the industry
    In 1985 the average fee was 1.5% and it is still 1.5%.

    If you are reading this Suren you are an idiot! If Suren's boss is reading this you are lazy and incompetant and really ought to stop your junior staff from embarrasing you in such a public way.

    • 27 January 2012 07:26 AM
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    "Mortgage arrangement fees have more than trebled"

    So tell me again why Estate Agents are blamed then?

    When the market is going up like a steam train and everything you list is selling fast, agents are quick to do attractive selling fees to get the properties onto their books. A higher ratio of stock is selling to cover all operating costs so agents can afford discounts.

    When the maket hits a crash and nothing is moving, agents need to get decent fees from the sales that do happen, so no more cheap fees!

    The banks on the other hand reduced lending in the first place, so they can hardly blame the low number of transactions (Which they want) as a reason for putting their fees up! get them to lend more, drop their fees and agents will sell more stock, allowing them to lower their fees again also.

    Don't get me started on Stamp Duty!!!

    • 27 January 2012 01:01 AM
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