It’s been revealed that the National Trading Standards Estate Agency Team is to deliver new guidelines to agents for referral fees next month.
There is no indication what the new guidelines will suggest but it is known that there will also be an updated code on the issue from The Property Ombudsman.
There will then be a review of the revised fees system in about a year’s time.
The announcement was made by junior housing minister Heather Wheeler this morning at the annual conference of the Council for Licensed Conveyancers.
Wheeler told delegates that home buyers should not choose their conveyancers by default, and that this initiative by NTSEAT should bring “excessive” referral fees to an end. “I’m concerned about the current lack of transparency” she told delegates.
Last week the Ministry of Housing, Communities and Local Government indicated that a government statement on the issue was likely “very soon” but no details were given; in the past, there has been speculation that there could be an outright ban, at least on fees coming from the sale of new-build properties.
In recent days the conveyancing service When You Move has stated that 32 per cent of home buyers complete little or no research on conveyancers and so choose those recommended by estate agents involved in the transaction.
Last year, separate research conducted by polling group YouGov for the Council for Licensed Conveyancers - which has its annual conference today - found that 59 per cent of those who accepted estate agent advice and used a recommended conveyancer were unaware that a referral fee was probably paid to the estate agency.
Just this morning we carried here on Estate Agent Today a story about one of the largest estate agencies in the Midlands, Newton Fallowell, saying it had made a remarkable £5m in referral fees from its 20-year link with conveyancing firm Move with Us.
The family run agency operates out of 36 branches across the Midlands region and has 40,000 clients a year.
Its managing director Mark Newton says: “The current market place is a maelstrom of falling fees as competition from online agents bites and conveyancing now forms an essential part of our turnover. We have tried other solutions over the years, but no-one else offers the joined-up thinking we get from Move with Us. Not only does it create a very successful revenue stream to help in the very challenging market, it provides our customers with a marketing leading service.”