Rogue agents back as house prices soar: Homeowners regularly handing thousands in hidden fees to estate agents
03-08-2014
- House prices now rising at fastest rate since the financial crisis in 2007
- Over the last 12 months they jumped by 7.9% the Halifax said yesterday
- February saw prices rise by £4,136 - to an average of £179,872
- Probe by HomeOwners Alliance raises fears firms are rushing to cash in
By Ruth Lythe
Homeowners are being routinely duped into handing over thousands of pounds in hidden fees to estate agents, it has emerged.
An investigation by the HomeOwners Alliance raises fears that firms are rushing to cash in on house prices rising at their fastest rate since the financial crisis in 2007.
Over the last 12 months they jumped by 7.9 per cent, the Halifax said yesterday. February alone saw prices rise by £4,136 – equal to £147 every day – to an average of £179,872.
Dubious practices: Estate agents rushing to cash in on the housing boom are routinely duping homeowners into handing over thousands of pounds in hidden fees, it has emerged
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Dubious practices: Estate agents rushing to cash in on the housing boom are routinely duping homeowners into handing over thousands of pounds in hidden fees, it has emerged
The investigation by the Alliance, which champions the interests of homeowners, revealed evidence of dubious practices in one in six telephone calls to estate agents.
These included hidden charges of up to £500 for items such as marketing fees, registration charges and prime listings on property search engines. Some firms locked sellers into contracts of up to five months even if the property did not receive any interest.
Others demanded sellers pay the estate agent at least £1,500 commission if a deal collapsed because a buyer pulled out. One agent was collecting a fee from both the seller and the buyer, when usually only the seller pays.
Paula Higgins, chief executive of the HomeOwners Alliance, said: ‘Estate agents are handling the biggest transactions in most people’s lives, yet they can’t give a clear upfront answer to the questions “What are your fees and how much will you cost me?”.’
Only 2 per cent of the 49 firms questioned published their fees and commission rates on their websites.
Sly: Hidden charges of up to £500 are being made for items such as marketing fees, registration charges and prime listings on property search engines
One in three agents refused to give even an indication of fees, which can be up to 2.5 per cent of the sale price, when prospective sellers first contacted them by phone.
Britain has 500,000 estate agents who are not required to hold any formal qualifications.
Mark Hayward, of the National Association of Estate Agents, said: ‘It is disappointing to hear of these practices.
While they are the exception and not the norm, we have long called for better regulation of the industry to prevent any unfair or unclear fees.’
÷ Stamp duty distorts the market by taxing buyers a disproportionate amount for going £1 over pre-set thresholds, the Royal Institution of Chartered Surveyors says. It wants a graded system which would work like income tax, abolishing the thresholds’ harsh effect.