Housing minister Eddie Hughes has confirmed that legislation on referral fees is currently not on the government’s legislative agenda.
The government is not planning to force estate agents to be transparent about referral fees earned from other parties within transactions, including conveyancers.
In a written answer to Labour MP Zarah Sultana, Hughes confirmed that the National Trading Standards Estate and Letting Agents Team (NTSELAT) had told him that “the majority of agents do disclose these fees”.
In his answer to Sultana, Hughes added:
“NTSELAT will continue to monitor compliance, and we will continue to keep the case for legislation under review.
The Government is clear that fees charged by conveyancers, estate agents and other property professionals should be determined by the market.
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.”
Speaking in a recent Bold Legal Group podcast, James Munro of NTSELAT said:
“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?’.”
In February 2019, NTSELAT published guidance on referral fees received by estate agents. This aimed to ensure that referral fees became more open and transparent to consumers.
Read the guidance here.
