The Government has no plans to take direct action to force estate agents to be fully transparent about referral fees they earn from third parties such as mortgage or conveyancing providers.
Housing minister Eddie Hughes (main pic) revealed during a written answer to a question by Labour MP Zarah Sultana that National Trading Standards Estate and Letting Agents Team (NTSELAT) had assured him that ‘the majority of agents do disclose these fees’ after being asked to monitor compliance.
“NTSELAT will continue to monitor compliance, and we will continue to keep the case for legislation under review,” added Hughes.
“The Government is clear that fees charged by conveyancers, estate agents and other property professionals should be determined by the market.
Fully disclosed
“However, where agents receive a referral fee for recommending services to their clients, these fees must be fully disclosed to clients before they make any decision to purchase.”
This draws a line under a prolonged campaign by NTSELAT and ministers to put the property industry under significant pressure during the past few years over referral fees, with other organisations including The Property Ombudsman chipping in with warnings.
At one point DLUHC warned agents that they faced a ban on referral fees unless they cleaned up their act.
Speaking recently during a podcast hosted by conveyancing giant the Bold Legal Group, NTSELAT boss James Munro (pictured) told its audience that “consumers – the public – have got to be made aware of their options and the questions to ask.
“Because of the nature of referral fees, it would be great if consumers when they’re using estate agents actually ask: ‘What arrangements do you have?”.
