Estate agents could be forced to disclose details about referral fees if they have failed to comply with National Trading Standards guidance to be more transparent.
The Council for Licensed Conveyancers’ annual conference heard this morning that a report on referral fees will be published next month. James Munro, head of the National Trading Standards Estate and Letting Agency Team, said the report will go to ministers ‘to decide whether this particular aspect of the market should be regulated or not’.
The Law Society is among those who have called for more openness on referral fees and regulation of estate agents. After examining the legal controls around making such fees transparent, National Trading Standards published guidance last February.
Munro told the conference that ‘if the industry is not more transparent they could face a ban on referral fees, which I think will cause a lot more upset than the tenant fee ban’.
Ministers will also be asked to consider whether they want to test reservation agreements.
Matt Prior, who has led home buying and selling work at the Ministry of Housing, Communities & Local Government, told the conference that behavioural insight work was commissioned. Kantar, a research, data and insight consultancy, is preparing a report with ideas, which will go to ministers who will decide ‘whether to proceed to the next phase’ – a potential field trial.
Prior revealed that consumer feedback to reservation agreements was mixed. ‘What struck me was the idea that people understand that the process of homebuying and selling is different. Some people like the power to be able to walk away.’
As a result, a ‘more rigorous’ option has been designed. Sellers and buyers will be required to make declarations on matters such as the property and mortgage status. Both sides will pay a £1,000 fee at the time an offer is agreed. Provided there are no problems, the money will become part of the deposit.