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Minister signals end to threat of referral fees crackdown for industry

After years of threats to ban them outright, Eddie Hughes now says legislation on referral fees is off the cards for the time being.

Nigel Lewis

eddie hughes housing minister referral fees

The Government has no plans to take direct action to force estate agents to be fully transparent about referral fees they earn from third parties such as mortgage or conveyancing providers.

Housing minister Eddie Hughes (main pic) revealed during a written answer to a question by Labour MP Zarah Sultana that National Trading Standards Estate and Letting Agents Team (NTSELAT) had assured him that ‘the majority of agents do disclose these fees’ after being asked to monitor compliance.

NTSELAT will continue to monitor compliance, and we will continue to keep the case for legislation under review,” added Hughes.

“The Government is clear that fees charged by conveyancers, estate agents and other property professionals should be determined by the market.

Fully disclosed

“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.”

This draws a line under a prolonged campaign by NTSELAT and ministers to put the property industry under significant pressure during the past few years over referral fees, with other organisations including The Property Ombudsman chipping in with warnings.

At one point DLUHC warned agents that they faced a ban on referral fees unless they cleaned up their act.

Link to Redress Scheme newsSpeaking recently during a podcast hosted by conveyancing giant the Bold Legal Group, NTSELAT boss James Munro (pictured) told its audience that “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?”.

May 23, 2022


  1. In all industries referral fees exist, and have done since Roman times, and commerce thrives on opportunities that a financial incentive rewards. Transparency is a good thing too, and the public are aware that stakeholders doing property have symbiotic financial relationships; and the public always has freedom of choice, they do not have to take the ‘recommended’ alternative offered to them.

    Like comparison sites, is the best deal the best deal? rarely and always somebody is earning off a new consumer using a service. Many like to lampoon estate agents as the villain, but would the public like to pay even higher fees as agents no longer had other legitimate income streams like FS and conveyancing referral income, as the law had changed to ban these?

  2. This is a backward step. have the government not learned from the PPI fiasco, the aftermath of which is clogging up the Civil court system
    ( yes that’s right, the same courts that deal with housing matters !! – and don’t be thinking that the PPI issue ended in 2007, as a case of Plevin in 2014 re-opened that ‘can of worms’ over-ruling the FCA quango’s attempted protection of the banks rather than consumers )

    Many Landlords will have found that after the Tenant Fee ban restricting Letting agent revenue, that a percentage ( usually 10% ) is added to contractors repair Invoices as an ‘ Administration charge ‘

    ALL charges need to be transparent, not hidden.

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