The finger has been pointed at estate agents for raising their fees and driving up the cost of home moving.
Lloyds Bank says the average cost of moving house now stands at £8,689, with estate agents getting most of the blame for a £431 increase last year.
According to the bank, rising estate agency fees accounted for 45% of all home moving costs in 2014 and drove an overall 15% increase.
The bank says there was a 7% rise in estate agency fees last year, and that this along with increased house prices was the main factor behind the escalating cost of moving home.
But the research, from Lloyds Bank, is based on a Which? figure of 1.8% estate agency fees which dates back to March 2011 – and is significantly at odds with more recent research done for Eye.
The Lloyds research has also assumed that 1.8% to have been used throughout the year and in all regions.
However, as Eye’s recent article by Stephen Hayter demonstrated, agents are unlikely to charge 1.8%. They are most likely to charge 0.75% to 1%, followed by 1.4%-1.6%, and then 1.2%-1.4%.
In 2014, says Hayter, of the UK’s largest conveyancing firm myhomemove, only 25% of estate agents’ invoices settled by his company were for over 1.6%.
Furthermore, according to Hayter’s research, the average estate agents’ fee has barely risen: in 2012 the average was £2,896 and today is just £17 more.
The Lloyds Bank research puts average moving costs during 2014 as follows:
Stamp Duty: £1,973 (down 1% on the previous year)
Estate agency: £3,867 (up 7%)
Surveyors: £665 (up 22%)
Home removal: £1,110 (same)
Conveyancing: £1,074 (up 7%)
Commenting on the Lloyds Bank research, Russell Quirk of eMoov weighed in, accusing high street agents of “greed and selfishness”.
He said: “It’s simply ludicrous that as house prices rise so do agents’ fees, yet the rise is the result of a buoyant market, and the work agents do remains minimal!
“It must be time for change. Percentage fees are draconian, unfair, and outdated.
“This greed and selfishness in the industry was a motivating factor behind the creation of eMoov, so sellers had an alternative route to sell without forfeiting large sums of cash from the resulting sale.
“Had all of the properties in 2014 been sold for £495+VAT, the eMoov standard price, UK sellers would have saved in the region of £2.9bn.”
The link to Stephen Hayter’s analysis on estate agents’ fees is here
Eye hopes that it will be picked up and used by future researchers, industry commentators and – dare we say it – by journalists bombarded with ludicrous claims about how much high street agents earn and how much online agents can save the public.
Could Rightmove also please take a look?
Rightmove currently quotes the Which? 2011 figure of 1.8% as the average agency fee on its moving costs calculator
Thus the fee on the sale of a £300,000 property is given on the calculator as £5,400.
Maybe – but maybe not.
Comments (22)
Bankers……… woody spell check is up the ball today 🙂
Interesting comments from Lloyds in addition to Andrew’s comments on charges above I think you can add £1000 arrangement fees on their mortgages, anywhere between £250-£700 Valuation fees and up to 5% of loan penalties for early redemption of the mortgage on fixed rate schemes – cost to borrower £14,200. What that about glass houses?!
The same Bank who were fined £105m for rigging the LIBOR rate, £28m for ‘fixing’ bonuses and £30m for mis-selling and having to pay back £98m to customers who had been over charged. It doesn’t make us seem too bad when you consider that the value of our % commission increases in line with house prices rather than blatant dishonesty.
Firstly the original article is clearly out of date as average fees are falling. The increase in competition, both High Street and online, as well as a lack of stock has seen agents reducing their fees to well below 1%.
However what I find most interesting about this story is the comment from Russell Quirk and I quote: “It’s simply ludicrous that as house prices rise so do agents’ fees, yet the rise is the result of a buoyant market, and the work agents do remains minimal!”
The work that online agents do is minimal but those of us that have been in the industry a while and who value our clients know how much work is put in before, during and after a sale if the job is done properly!!
This story is sadly lacking some journalistic fight (remember that, in the old days?)
Stephen Hayter article, compiled using real data from a large conveyancing outfit stated “in 2014 [fees of more than 1.6%] was the case for only 25%, which means that the majority (nearly 54%) are now for less than 1.4%, and most are between 1.2 and 1.4% or 0.75% and 1%.”
When you use these numbers the story reads very differently.
Also, is it just me or is this story – and Lloyds’ angle – also missing the massive increase in mortgage arrangements fees we have seen since the Lloyds-assisted banking crash. What used to be around £499 is now typically £1,499.
Never let facts get in the way of a good story……
I think this report is analysis of a larger data set than Stephen Hayter has access to.
I suspect Lloyds have accidentally just confirmed that they have been given access to and are analysing the data in a set of web based systems which because of their cost are with better agents who charge better fees.
An average is only an average of the data sampled, Stephen Hayter will have a true representative spread where as the data sample for this analysis could share a commonality.
According to the stories published on Eye, Lloyds bank now have a £19,000,000 interest in multiple web based Agency software systems, Jupix, Vebra, Encore 32 and Alto. It might be a coincidence but such a large and readily accessible set of data has to be a massive temptation for an institution who have previously invested in the sector to get access to the very same set of data.
That would be OUR data, wouldn’t it…?
And, that being the case, certainly SHOULD NOT be “readily accessible”…
If you were running your own server or locally installed system would you allow me to wander into your office and have a quick look see at your commission rates or unfettered access to anything you have valued, listed, completed on or had withdrawn? I am guessing the answer would be no.
One of the real big advantages of web based systems is the multiple office, access anywhere, access anytime nature of the system, the problem comes with who else is able to have a sneaky peak at data that would otherwise be locked down quite tightly even in some cases restricting access by your junior staff.
It doesn’t matter whether it is Rightmove, Zoopla or your individual software suppliers anything hosted or stored with them remains yours and you the agent should have full knowledge of who your data is being viewed by and for what purpose. You should also have the ability to remove completely any data, at any time so it is no longer available to anyone let alone used by anyone other than you.
Whether someone has been given access to any hosted system I can’t say for sure but I can recommend Agents check they have not signed away the rights to have their data protected or accessed. If the data is being accessed or rights signed away it is probably a good idea to evaluate whether such access is beneficial or detrimental to the business.
In respect of the portals I am very surprised that completed and withdrawn data is not being purged once properties are complete or withdrawn. It is that data which allows the online valuation models to exist. Without AVM data your very special mate Russell and the like would not be able to operate anywhere other than locally to where they or their staff know. Without online valuation models neither he, the other passive intermediary internet listers or the FSBO systems could stand a chance of being credible. Their coverage is so thin they have no significant comparable data of their own so in order to appear even partly professional they must have access to data, if the access is restricted so are their activities.
Wise words, Robert. With respect to the great majority, we all know and scoff that the ‘small print’ on a Contract is most often ignored by our own clients – yet we do it ourselves when presented with the same.
In respect of ‘dead’ data you refer to, it was not until you asked me to Beta your own in-progress ‘Sortal’ (credit: Robert May) that the amount of such withdrawn data became apparent to me – and it’s a scary amount.
If it were dead data laying there dormant and un- used there would hardly be a problem but it isn’t dead, it is greyed out but still active and being used to power your competition. Going in through the front door of Rightmove and Zoopla the data isn’t noticeable so you have no reason to have noticed it.
I have previously likened portal use to drug dependency, the portals have created a system that relied on their own front end to access results which are effectively coded and camouflaged. The wood is hidden by the trees! Your data is there as part of the optimisation function of the main portals, without it individual agents would find a place at the top of a natural Google ranking ahead of the portals that create the illusion of dominance. Once that happens the illusion is broken.
I have to say you weren’t supposed to have noticed all that chaff data just yet, I wanted you to come to the realisation of what is happening once a few more people have seen the alternative. A property website that genuinely levels the playing field and is un-corruptible by cash, connection, history or SEO spend. I am guessing you can see why/ how I am creating a sortal to serve agents rather than a portal that only really serves itself.
It is all very good acknowledging the issue with data but what are you / your firm going to do? , shrug your shoulders and dismiss the debate as something said on Eye, tomorrow it can be forgotten or are you going to take the terms home and read through what you have signed up to; SAAS and portal terms?
Ian Springett identified both the portals and SAAS providers as threats, you know how much heat I got trying to emphasise this one subject in the discussion about why agents should join AM. As an affinity group created and solid there is now an opportunity to demand clarity about agents’ data and to demand proper control over the use of data. I have given you the tools to look back and you will find Data was always a greater motivation to me than subscriptions as I believe it is the misuse of data that is driving fee erosion by enabling competition that is uncompetitive without said data. Those who can’t value can’t compete!
Yesterday’s news already!
4 words…
Former S*r Fred Goodwin?
2 words
Banks & Credible?
1 word
Nope!
…and I quote, from the Lloyds Bank Mortgage costs web page….plus a hatful of other “mortgage realted” charges. They don’t seem to asppear on their report…pot, kettle, black……
Mortgage account fee
This fee is to cover the setting up, routine maintenance and closing down of the mortgage account.
£295
Transfer of mortgaged property (transfer of ownership)
We charge this fee if you ask us to add/remove names to/from the mortgage.
£160
Closing administration charge
The Closing administration charge does not apply to mortgages entered into on or after 1st August 2007. If a Closing administration charge applies to your mortgage, the amount of the fee will be shown in your Annual Mortgage Statement. It will also be shown on any Amount Owing Statement we issue. The fee is charged when your account is closed.
Up to £50
Forgive my lack of constructive comments….
Lloyds Bank telling us what?….
I’m sorry, after the Bank Fiasco your comments aren’t worthy of consideration for a 1000 Years!… after the financial mess, mis-selling and billions of bale-out money?!
Get back behind your desks and get on with banking!
Mr Quirk says “This greed and selfishness in the industry was a motivating factor behind the creation of eMoov, so sellers had an alternative route to sell without forfeiting large sums of cash from the resulting sale”
Lloyds article, WHICH QUOTES NONSENSE FIGURES, was just one more bandwagon for him to ride on to promote his business. And he is so disingenuous because he knows very well agents fees have come down. The myth he is trying to create that a) you can sell your home on line for the best price and b) that it’s easy to do so, is massively misleading to the public. The complexities involved in the whole process are in most cases totally beyond the knowledge, ability and time available to the average seller. And when there is no agent involved to co-ordinate everything, buyers are left flapping in the breeze. It is not a cost saving.For most it will likely end up with them loosing a fortune and becoming massively stressed into the bargain.
But who in their right minds believe anything Lloyds Bank might have to say? This is the bank that ripped off its customers with bad advice, mis-sold PPI. A bank with no professionalism or credibility in my view? Next we will have landlords believing that Labour policies would be good for them!!!
Even with the poor press estate agents have it has never gone down to the depths that the banks managed!
I do and I have good reason to think this is not an assumed average commission either.
The 7% increase is explained away simply by looking at the statistical increase in property prices. If property prices double agents commission will double so from that point of view it is a non story.
The question that has to be asked is why Lloyds bank would pluck 1.8% out of the air. 1.8% isn’t a pluck out of the air sort of number; 1, 1.25. 1.5, 1.75 & 2% are pluck out of the air numbers, so I think their is more analysis than assumption about the 1.8%.
Oh Ros – why do you include that stupid quote from the boy. A good article ruined by a silly quote.
1.8%!! I wish….what utter drivel. UK is in the whole a 1% marketplace, and no article on fees would be complete without a howling at the moon “Quirky” comment. Recently had a client switch from The Quircky company, they couldn’t offer any advice on pricing, strategy, or marketing, the viewer feedback was terrible and non constructive and when he mystery shopped them on his own property the details were wrong, yep, pay peanuts get……….
So Lloyds have it all wrong on fees and to add a bit of fun to an otherwise dull article based on inaccurate nonsense from a Which report we have Russell Quirk getting the call from Ros to add a bit of go to it all and the boy has done good! – little wet patch in his trousers, bits of spit flying all shouty and confused why everyone that sold a house in the UK last year didn’t use him……..it’s all goin online init!!!, and then he left the VAT off, splendid work fella.
Is there someone out there that has the skill and time to do a ‘hitlers bunker’ parody of Quirky boy? – Jonnie
“Had all of the properties in 2014 been sold for £495+VAT, the eMoov standard price…”
Er… excuse me, Mr Quirk – let’s keep it legal even if it IS ********.
You mean £594 INCLUDING VAT.
Plus add-ons.
UPFRONT “marketing cost”. No guarantees.
There you go. You’re now all street legal and ready to rock. Can I be your Marketing Minion?
Don’t get lost in the vexatious ‘if only’ of the comment Peebee, only 2% of the selling public bothered with passive intermediary, internet listers. 824,000 vendors out of 840,000 preferred to pay through the nose not to deal with him or his sorts.
16800 vendors paying £500 a pop is not the sort of revenue to pay a return on the £30,000,000 being pumped into internet listing agency so rather than get all worked up sit back and chuckle at the niavety of it all.
The King isn’t made up to the nines in fact we can all see his winky!