CLC Welcome Referral Fee Transparency And Guidance
The Council for Licensed Conveyancers (CLC) have welcomed the recent guidance to estate agents on referral fee transparency, claiming they are a ‘step in improving the homebuying process for consumers.’
Clarification on referral fees guidance was speculated during the opening talk at the Council for Licensed Conveyancers annual conference when Heather Wheeler, Minister for Housing and Homelessness, outlined the government’s position on referral fees and new housing reforms with Mrs Wheeler informing delegates that she is “concerned with the lack of transparency” around referral fees.
Following the National Trading Standards Estate Agency Team (NTSEAT) survey which aimed to assess the use of the fees, that was launched in the summer of last year, the government have continued to explore how it can improve the buying and selling process for consumers.
The guidance was finally revealed on 28 February, with explicit instructions that referral fee information must be shared with buyers and sellers with any failure to comply having the potential to “render an estate agency liable for criminal prosecution.”
Mrs Wheeler emphasised that estate agents will need to be upfront with their clients regarding referral fees. All buyers will need to be aware of the panel of conveyancers used by the estate agent and the cost that will be applied to them if they use a recommended conveyancer.
Stephen Ward, Director of Strategy at the Council for Licensed Conveyancers (CLC) said: “This is another welcome step in improving the homebuying process for consumers. Transparency across the whole market is essential and this is a very positive step coming so soon after the housing minister, Heather Wheeler, announced it at our annual conference in January.
“We want consumers to be able to make an informed choice based on all the available information and our recent research found that most home-buyers did not know whether their conveyancer paid a fee to an estate agent in return for a recommendation. Further, with estate agent recommendation one of the primary factors in influencing a consumers’ choice of conveyancer, it’s crucial that consumers are aware that such relationships exist before they make a decision.
“The publication of this guidance, along with transparency requirements introduced by the CLC and other regulators from December last year requiring all property lawyers to publish certain price, service and quality information on their websites means consumers will be more empowered than ever before.
“The Minister has made it clear that if estate agents do not respond positively to this initiative she has not ruled out legislating against such fees. So, the onus is now very much on estate agents to make consumers aware when fees are being paid.”
What will the latest guidance mean for the conveyancing sector? Will the latest transparency guidance create a fairer market for buyers and sellers?