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Agency criticised by politicians after charging buyer's premium of £2,940

An estate agency that allegedly charges people a “buyer’s premium” has been criticised by politicians for unscrupulous “sharp practice”.

The Scottish First Minister, Nicola Sturgeon, says she will look into the agency - McEwan Fraser Legal - after the issue was raised in the Scottish Parliament at Holyrood.

The Herald of Scotland newspaper says one MSP, Andy Wrightman, told Sturgeon that one of his constituents, who had been saving 12 years to buy his first home, had been asked to pay a premium fee of £2,940 on a £130,000 flat.

“If prospective buyers do not agree to pay it, the property is offered to the next bidder who can pay it. Does the First Minister agree that the buyer’s premium fee is an example of unscrupulous, unethical ... sharp practice by McEwan Fraser Legal?

Will her government look into the issue and assess the legality and morality of a practice that adds further costs to the process of buying a house?” asked Wrightman.

Sturgeon is quoted as replying: “I am happy to look further into that matter. I absolutely agree that fees that are charged by estate agents should be completely transparent and clear. I understand that the Scottish Government has recently received one complaint about the charging of a buyer’s premium.”

A spokeswoman for McEwan Fraser Legal told the newspaper: “If a buyer is unwilling to pay the buyer’s premium or believes the premium is not justified on any particular property, they simply don’t purchase the property or adjust their offer for the property accordingly – it is no more complicated than that.

"We believe the buyer’s premium has encouraged more sellers to bring their properties to the market, where they would have otherwise been put off with the high costs of buying and selling properties, particularly with the introduction of the Additional Dwelling Supplement."

The Additional Dwelling Supplement is the equivalent measure to the stamp duty three per cent surcharge on additional properties, levied in England and Wales.

You can see the full Herald of Scotland article here

  • icon

    Isn't this how many action houses do it already?? No one seems to complain then? The parliament has only had one complaint and they are actually looking into it, wow!!

  • Simon shinerock

    We act as buyers agents, what's the difference if any? Perhaps they think it's unfair to charge the buyer or the seller, perhaps middle men and women should all be put in the stocks and pelted with rotten fruit, perhaps someone should anyway

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    acting for one OR the other is fine - but not both! The RICS has just outlawed the practice of the same firm acting for seller and buyer.

    Colin Bain

    They are not ACTING for the buyer, just charging them a fee to buy a property similar to how an auction works.

     
  • Colin Bain

    Agreed, auctions charge the sellers a fee to enter the auction, a sales fee and a buyers premium which is all upfront. It is not as if the buyer was not told about the fee. Typical left wing Green MSP's thoughts !!! He is also being sued at the moment for £750k for defamation and claims to have his name as a campaigner on issues such as owners preventing land reform. He has his own Agenda me thinks??

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    Don't forget, this is Scotland, not England or Wales. The TPOS Guidance for Agents, as amended, section 5 (iv) states quite categorically: "Current HMRC policy is that the chargeable consideration for a land transaction is what has been given in order to acquire the subject -matter of the transaction, by the purchaser or a person connected with him. THIS INCLUDES FEES WHICH HAVE TO BE PAID IN ORDER TO ACQUIRE THE PROPERTY. THIS MEANS THAT WHATEVER THE BUYER PAYS IT WILL FORM PART OF THE PURCHASE PRICE OF THE PROPERTY AND IT WILL BE INCLUDED IN HIS LIABILITY FOR STAMP DUTY. This is why the amoral habit of charging both buyer and seller has somehat diappeared down here over the last 12 months.

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