Government Insist On Estate Agent Referral Fee Transparency

Government Insist On Estate Agent Referral Fee Transparency

New research from the Council for Licensed Conveyancers (CLC), carried out by YouGov, has found that 59% of the 500 respondents who accepted estate agent advice and used a recommended conveyancer were unaware that a referral fee was paid to the estate agency.

It was this lack of communication that Heather Wheeler, MP, believes should be avoided in the future with a more transparent approach expected moving forward. Consumers should be aware that the driving factor in an estate agent recommendation could be the money they are paid by the conveyancer as opposed to a legitimate belief in the firm’s services. It is thought that understanding this information could drastically alter the way a home buyer would choose a conveyancer in the future.

Additionally, the CLC backed report has highlighted that a recommendation from an estate agent is still the most popular route for home buyers choosing a conveyancer with 26% of respondents using this process. Interestingly, 18% would also use a conveyancer solely based on a recommendation from a trusted person; highlighting the importance of recommendations for conveyancing firms.

21% of home buyers were price sensitive and used a clear price to inform their decisions, whilst 20% would reuse a legal service provider.

Sheila Kumar, chief executive of the Council for Licensed Conveyancers, said: “We are not saying that it is wrong for conveyancers to pay referral fees, but transparency is key and that is why CLC lawyers have always had to inform clients about them.

“However, it is important that the client is aware of the payment of referral fees before deciding who to appoint. So, we welcome the government’s proposals that estate agents should be required to be transparent about referral fees they will receive if their client follows their recommendation.

“It is in the interests of both the public and those we regulate that consumers have easy access to useful and easily comparable information to guide them in their choice of lawyer. That is what all of the front-line regulators of legal services are introducing new rules with the aim of empowering consumers to make better informed choices.”

Heather Wheeler, MP for South Derbyshire and Parliamentary Under-Secretary for Housing, Communities and Local Government, said: “It is so important that estate agents are transparent about referral fees. That’s why we are working with the industry to ensure estate agent referral fees are clear, so consumers can make an informed decision before they decide to purchase.”

Because so many people trust recommendations and use this as the basis for solidifying their decisions, it is important that the consumer is aware that a key factor in the estate agent recommendation is the fee they are paid by the conveyancer as opposed to a holistic belief in the conveyancing service itself.

What would a reduction in referral fees mean for the conveyancing sector?

Martin Parrin

Martin is a Senior Content Writer for Today’s Conveyancer, Today’s Wills and Probate, Today’s Legal Cyber Risk and Today's Family Lawyer

Having qualified as a teacher, Martin previously worked as a Secondary English Teacher that responsible for Head of Communications.

After recently returning to the North West from Guernsey in the Channel Islands, Martin has left teaching to start a career in writing and pursue his lifelong passion with the written word.


  • “20% would reuse a legal service provider”

    So 4 out of 5 would not!

    A reduction in referral fees alone is insufficient to address the issue alone

    • I agree; most people who use one of the conveyancing farms recommended by estate agents (who are virtually all Licenced Conveyancers) only do so once.

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