Agents accused of charging reservation fees up to £2K

There has been an increase in estate agents charging buyers reservation fees of up to £2,000, according to the Property Redress Scheme.

Fees usually starting at £500 have become a big source of income for agents who benefit if a sale falls through, the PRS claims.

‘Open to abuse’

Sean Hooker, Head of Redress at the PRS, told The Daily Telegraph that the fees are “open to abuse”, and called for the Government to regulate agents.

“The concerns I have are whether these fees are transparent enough, and what is a ‘legitimate’ reason for a buyer to pull out and get this fee back,” he says.

If anyone should retain the fee, it’s the seller.”

“If anyone should retain the fee, it’s the seller. But I suspect some agents are taking this fee instead, and that’s why we need clear guidance and rules on it.”

He says that because the fee is ‘technically voluntary’ agents can charge whatever they like.

There aren’t many complaints about reservation fees, Hooker says, because buyers accept it is non-refundable.

Any action by property agents to rip off consumers is completely unacceptable.”

A spokesman for the Department for Levelling Up, Housing and Communities told the Telegraph: “Any action by property agents to rip off consumers is completely unacceptable.

“Property agents – including estate agents – must already belong to a redress scheme so that buyers and sellers can complain when they receive a poor service.

“We continue to work with the industry on improving best practice across the property agent sector, and measures in the Leasehold and Freehold Reform Bill and Renters (Reform) Bill will help to drive up overall standards.”

Regulation ‘not a priority’

Lord Best told The Neg recently he fears the Government still doesn’t see property industry regulation as a priority.

It is nearly five years since his working group called for regulation of property agents.

In March, a Lords Committee called for a regulator backed by a licensing scheme for agents.