Conveyancing body launches referral fees probe after BBC investigation
Council for Licensed Conveyancers reveals BBC probe into conditional selling has persuaded it that estate agent commission for referrals needs a major overhaul.
The conveyancing industry’s trade body is to launch a wide-ranging review which will examine the issue of referral fees paid to estate agents by legal firms, and in particular whether they have narrowed consumer choice.
The Council for Licensed Conveyancers (CLC) has launched the review following the BBC Panorama investigation into conditional selling within the industry and the ‘questionable tactics’ – the CLC claims – of certain estate agencies, which the organisation says may be impacting the conveyancing sector by limiting consumer choice of legal advisor.
During the programme, it was revealed that as well as pressuring some buyers to use its in-house mortgage broker, conveyancing referral fees were also an issue tied to ‘conditional selling’ by Connells.
“An apparent disregard for consumer choice and transparency
The CLC says the practices by the agency staff featured in the programme showed an “apparent disregard for consumer choice and transparency on pricing affecting conveyancing service provision”.
Its statement says: “We have no evidence to suggest that practices as unethical as those highlighted in the programme are prevalent in the sector we regulate, but in the interests of ensuring genuine consumer choice, the CLC is today announcing plans to undertake a thematic review focused on referral arrangements”.
Review date
This review will begin in early 2026 and will look at referral arrangements including their prevalence, value and transparency and also its members’ compliance with the CLC’s transparency rules to ensure that the ‘client interest remains paramount’.
“Ahead of the review, we strongly encourage all CLC practices, and particularly those that have paid referral arrangements, to review their compliance with the CLC’s transparency and informed choice rules,” it adds.
“We encourage any practices that are not fully compliant currently to take appropriate steps to ensure their compliance before the review commences.”
“CLC lawyers are reminded of their obligation to uphold the Ethical Principles set out in the CLC Code of Conduct, which includes the requirement to act with integrity, honesty and independence and in the best interests of clients.”
I think that conveyancers/conveyancing solicitors will need to up their advertising spend considerably if agents and other stakeholders that ‘introduce’ new business are cut out of the sales cycle. Also agencies will have to cover the lost referral revenue that feeds into employees and the companies. Estate agency is typically a basic salary plus commission industry: these commissions are numerous, from the sale of property, solicitor and financial services referrals, surveys, utility switching, maintenance of lets the list goes on. Tpically a high performing estate agent will be earning 9% to 17% a year from connecting people who need property services to the ‘right’ people. In all industries there is a ‘hidden’ network of commercially led introductions, working people have busy lives and the fantasy that commerce is not driven by personal or commercial gain is simply not true, but there is no conflict if the person doing the referring does so because they believe it is the best outcome for all stakeholders. Example a corporate agent may have many thousands of transactions a year it introduces to a select panel of solicitors – is this terrible – are the solicitors more likely to perform – will there be strict KPI’s on conversion translating into more buyers and sellers getting moved, and will strong business partnerships not be formed? Agency with 16K of agents and 4K of conveyancers is still a national cottage industry, it is slow the UX for sellers and buyers is painful beyond belief. imagine if Amazon promised delivery in 28 weeks and 30% of the goods never arrived – that is the future – more software less human.