Referral fees

What are referral fees?

Referral fees are where an estate agent receives a commission, payment, fee, reward/gift or another benefit from a third-party service provider for recommending their service to the buyer or seller. The Ministry of Housing, Communities and Local Government has expressed a view that a complete ban will be considered unless the sector ensures transparency of referral fees.

Making referral fees transparent — NTSELAT guidance

In February 2019, the National Trading Standards Estate and Letting Agency Team (NTSELAT) published guidance on referral fees received by estate agents across the UK. Their aim is to ensure that referral fees become more open and transparent to consumers. The guidance was produced with our assistance at NAEA Propertymark, The Property Ombudsman (TPO) and other industry bodies. NTSELAT will now monitor the market for 12 months and report to Ministers on agents compliance with its guidance.

View guidance

Mark Hayward

Mark Hayward
NAEA Propertymark Chief Executive

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'NTSELAT has given the industry an olive branch. Rather than an outright ban, we’ve been given the opportunity to improve the practice of charging referral fees by increasing transparency. However, if the guidance isn’t taken seriously then referral fees could be banned when the guidance is reviewed next year'.

'We’ve long called for guidance which is easy for both agents and consumers to understand and comply with. Buying a home is no mean feat, it’s probably the most expensive type of transaction we engage in—so transparent and fair fees are essential. It’s important all agents take the time to understand the guidance and ensure they are compliant'.

What estate agents across the UK need to do

  • Be fair: information on referral fees must be provided to buyers and sellers in advance of them making any transaction-based decision.
  • Be transparent: make it clear on property particulars (online and offline) and be bold, compelling and specific. Including who you receive referral fees from and the value of each referral.
  • Act in the consumer's best interest: make sure that both buyers and sellers can make an informed decision.
  • Status: outline where a referral arrangement exists, that it exists and with whom.
  • Timing: inform the consumer well in advance of offering the choice as to whether to use a recommended service provider.
  • Clear: provide the information to consumers in writing and tell them they can also source and use different providers.

Improving the home buying and selling process

In December 2017, the UK Government called for evidence into how to the home buying and selling process could be improved—referral fees formed part of this inquiry.

Our response

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Referral fees webinar

Mark Hayward discussed key points resulting from the NTSELAT guidance and explained what you need to do to ensure your referral fees are clear to your customers. Watch now...

Estate agents at NAEA Propertymark Workshop

Free workshops

We host workshops across the country, which are free for members, to ensure that agents understand their obligations and are up-to-date with industry developments. More info...

Couple looking at estate agent's window

Consumer Protection Regulations (CPRs)

CPRs ensure that consumers have appropriate information when making a 'transactional decision'. More info...