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TODAY'S OTHER NEWS

Future of referral fees may be revealed at upcoming conference

The annual conference of the National Association of Estate Agents takes place on February 27 - the date when the future of referral fees may well be decided.

On February 28 2019 - so almost exactly a year earlier than the conference date - the National Trading Standards Estate and Letting Agent Team announced it would monitor the referral fees market for the next 12 months.

When that year finishes - on exactly the date of the NAEA event - the NTSELAT is to write to ministers reporting on whether the industry has complied with new guidelines on referral fees issued early last year. 

James Munro, head of NTSNELAT, will address the NAEA delegates on the issue.

That 2019 guidance - produced with assistance from NAEA Propertymark, The Property Ombudsman, the Property Redress Scheme, the Guild of Property Professionals and the Royal Institution of Chartered Surveyors - attempted to improve transparency surrounding the fees. 

The guidance suggested that referral fees were permissible, but should be disclosed by agents to sellers and buyers alike.

The then-Parliamentary Under-Secretary of State at the Ministry of Housing, Communities and Local Government - Heather Wheeler - said that the government wanted referral fees to be transparent and would consider banning the fees if this could not be achieved by the industry’s voluntary adoption of the guidelines.

Wheeler has moved on to a junior foreign office role in the new Boris Johnson-led administration but the current House Secretary and Housing Minister - Robert Jenrick and Esther McVey - are believed to be committed to the same timetable.

Also speaking at the NAEA event will be Matt Prior, who is home buying and selling policy leader at the Ministry of Housing, Communities and Local Government, as well as Paul Tenant, chief executive of the Law Society; both are likely to throw light on the latest progress on reforming the house buying process.

The head of UK residential research at Knight Frank, Grain Gilmore, will also be present at the event, which is being chair by BBC News business journalist Sally Bundock. 

  • Rob Hailstone

    The $64,000.00 question must be, are enough (more?) agents now disclosing to sellers and buyers their referral fee arrangements?

    Matthew Payne

    They have no excuse not to, it only needed an extra sentence set out in the correct way, in the appropriate place being added to their TOB.

     
  • Peter Ambrose

    I can't help feeling that there is a collective holding of people's breath over this highly contentious issue.
    The reality is that there is nothing fundamentally wrong with referral fees in principle but they can cause a conflict of interest and result in referrers being guilty of bribery if they are not acting in the best interests of their clients.
    There is a clear precedent for this - it would appear that these might be going the same way as lettings fees.
    This would cause major disruption to supply chains ....

  • icon

    I always like to put myself in the clients shoes before doing anything. It seems that a good relationship with a professional supplier may involve a fee but its the service (not the fee) that should drive that relationship. You get 4 times more business if you are good at what you do. The more you pay as a fee is typical of poor service provision or of over zealous lead providers placing pressure on service providers to over charge the client. Whats in the best interest of the client is to be transparent and not to try and avoid the conversation. I am a mortgage advisor at Exclusive Financial and it is a legal requirement to disclose any fees upfront before actually doing business. AND there are No issues whatsoever as long as you are sincere and explain what the charge is for. Put yourself in the clients shoes - they are not stupid. Treat clients with respect and you wont need to advertise and we can shake of the used car salesman estate agent stigma.

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