The SRA and CLC have staunchly campaigned that price transparency will enlighten an opaque industry where many clients feel as though they are confronted with hidden fees they were not expecting.
A recent nationally representative report, by QuickQuote, has found that British home buyers spend an average of £8,113 in unexpected fees, in addition to their deposit.
The data reveals the true disparity between saving for a deposit and the money needed to pay costs that were unexpected; overall, this meant that they were forced to take over £8,000 from their deposit or find funds from alternative sources.
On average, home buyers needed to ask for around £16,712 in funds from the Bank of Mum and Dad. This equates to a fifth of the population that are reliant on close family and frineds.
When saving for a deposit, 48% were forced to save up at least £25,000 to cover the deposit cost and unforeseen fees. 31% or over 9 million of all home buyers lost a significant proportion of what they had saved in unforeseen fees.
Because a quarter of buyers did not save up for the hidden fees whilst saving for their deposit, they were left in limbo; uncertain whether they could afford to progress through the completion process without borrowing money they were struggling to afford.
Once a home buyer had instructed a solicitor, 25% of those surveyed felt their solicitor had misled them in relation to the true extent of fees regarding their legal services.
Whilst 31% of home buyers felt blindsided by the true extent of property costs on top of a deposit, an astonishing 28% of home buyers would have pulled out of the property purchase if they were aware of the true extent of the fees they would be expected to pay.
Simon Bath, CEO of When You Move, said: “These statistics are very alarming. In the current political turmoil, the industry as a whole should be working towards making the home purchasing and selling process a lot more accessible for all parties involved. Homebuyers should be aware of the full extent of costs associated with their transaction. This should not be a longwinded and outdated process through which a consumer has to wait until a service is engaged to know the cost of the service provided.
“Transparency and efficiency should be the fundamentals of the service estate agents, conveyancers and mortgage brokers offer. The SRA and CLC regulations coming into effect in December mark another opportunity for property professionals to improve the service they provide to their consumers. Within seconds and 24 hours a day, consumers should be able to access a full breakdown of the cost of their conveyancer, surveyor and so on.”
Is more education needed to be given to home buyers in order to help them prepare for additional costs? Are you prepared for price transparency? Will price transparency create a more understandable system for consumers?