By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards


Reveal referral fees now and don’t wait for law change, says NAEA

The National Association of Estate Agents has thrown its weight behind the recommendation of Trading Standards that agents must by law be obliged to give buyers and sellers details of all referral fees they receive.

On Friday the National Trading Standards Estate and Letting Agent Team released the recommendations following a long-running project monitoring the transparency over referral fees during the sales process.

Now Mark Hayward, outgoing chief executive of NAEA Propertymark, says: “New legislation which will require agents to display referral fees is a step forward, providing clarity to agents that they mustn’t fall foul of the law but importantly ensuring greater transparency for consumers to avoid any confusion about what agents are charging for. 


“This is something we’ve been working closely with government and the National Trading Standards on, and given that agents were facing a complete ban of referral fees, we would strongly advise that anyone who isn’t currently displaying their fees should start now, regardless of when the new laws will come into force.”

NTSELAT has told the government agents must be obliged to display such fees and says agents who flout this rule should be banned from the industry.

The proposal follows a review into the practice of referral fees and their impact on buyers and sellers in the UK property market carried out by Trading Standards at the request of the Ministry for Housing, Communities and Local Government. 

The recommendations include proposals for government to make transparency of referral fees mandatory and require a warning to be given to customers that they should consider shopping around, plus a public awareness programme to warn consumers about hidden referral fees, and additional industry guidance with professional bodies and redress schemes to encourage compliance.

Accompanying the recommendations at the end of last week, James Munro, senior manager at NTSELAT, said: “Mandatory disclosure of referral fees would ensure there is full transparency around this practice, helping to build consumer confidence in the estate agency industry and demonstrating the duty of care agents should have to both parties in a property sale.”

The recommendations are now to be studied by the government according to Housing Minister Chris Pincher, who says his administration is in favour of the principle of greater transparency in the selling and buying process. 

Poll: Should agents display referral fees before any law change?



    Is this truly a priority? It's very hard to see how there is a true conflict of interest here. No agent is going to refer their clients to a bad conveyancer for a few hundred quid in referral fees: why would they put their commission at risk?

  • Rob Hailstone

    Many times in the past has a negotiator said to me, I would love the seller to instruct you Rob, but my hands are tied and I need to reccomend our panel firm, even though they are rubbish!

  • icon

    Rob is correct but I think this problem is a lot less acute than people think. Even the seemingly very 'solid' panel arrangements of the 3 largest groups only succeed in converting about 50% of their customers to to the panel conveyancer. This is because local agents refuse to use the system on grounds of quality. Panels are the problem. Don't forget that they can make money from Searches even without the referral fee. The key point here is that local agents should create their own arrangements with firms they trust, not with panels where they have no control over who does the work. I see no problem in referral fees being paid in those circumstances: ie no serious risk of conflict.


Please login to comment

MovePal MovePal MovePal
sign up