Estate agents in the UK are cutting back their sales commission to as little as 0.5% in a bid both to compete with online agents and fight for diminishing sales instructions, it has been revealed.
The figures come from research by international property portal Tranio, which also puts the UK at No.17 in the world ranking of agent commissions.
The company says it found that although the claimed average commission scheme for the UK is between between 1.5% and 3.5%, is can go as low as 0.5%.
Tranio, which is based in Moscow but has representatives in several European countries, reveals that UK vendors get one of the best deals in the world among the developed property markets, and that in some countries agents charge up to 8% to sell a home.
At the top of the commission list is France, where the seller’s commission varies between 4.5% and 8% followed by Croatia where commissions begin at 3% and top out at 8%.
In Italy its between 2% and 7% while in Montenegro it is between 3% and 6%
A five percent commission rate is the most common and is charged by Hungarian, Swiss, Thai, US, Finland Czech, Spanish and Greek estate agents.
In the UK, Tranio quotes London agent Dmitry Zakirov from LonGrad, who says that competitive and “saturated” markets are increasingly seeing fees dropped to half a percent. He says the norm in the UK remains at between 1.5% and 2%, “aggressive agencies such as Foxtons have higher fees of between 2.5% and 3%”.
One big difference between all the countries is how much VAT is charged by their governments, and some make the UK’s 20% rate look low. For example, in Hungary it’s 27% followed by 25% in Croatia and 24% in Finland and Greece.