Following last year’s Call For Evidence, the Government has announced plans this week to professionalise the estate agent market by introducing new regulations and standards into their practices.
These new measures aim to professionalise services and practices within the home buying/selling process to improve consumer experiences, drive up standards and bring an end to ‘rogue managing agents.’ Housing Secretary, Sajid Javid, said “for far too long buyers and sellers have been trapped in a stressful system full of delays and uncertainty.”
With a strong focus on referral fees within the Government’s response, estate agents need to be aware of the changes coming in to play and ready to act in preparation for the huge impact these changes will have on the entire referral process.
Making referral fees transparent
Under these new regulations, estate agents will now have to disclose any fees they receive for referring consumers to mortgage brokers or conveyancers, in order to increase transparency for customers. The Government has said its goal is to “ensure that customers are made aware of any potential referral fee before they make a decision whether to purchase.” Many agree that the regulation of referral fees is long overdue, such as Paula Higgins, Chief Executive at Homeowners Alliance who said “requiring estate agents to state upfront if there is a referral fee and how much it is for, will make the system fairer and will discourage the greedy agents.”
Enforcing the rules
To regulate these new referral fee disclosure rules, the Government has committed to strengthening the National Trading Standards Estate Agency Team, so they are able to monitor these disclosures and carry out enforcement activity on those who do not meet these new standards.
This is in response to the results of last year’s Call For Evidence, which revealed that 76% of people would like the government to take further action to enforce current transparency regulations regarding the disclosure of referral fees. The results of the Call For Evidence clearly show that the current home buying and selling process isn’t able to provide customers with the service they need or expect, which is why we’re pleased to see these new regulations come into effect to professionalise the industry.
Future-proofing for a possible ban
There is also discussion around banning fees altogether for new build properties, however, these have not yet been confirmed by official sources. Whether the ban on referral fees comes into effect soon or in the future, estate agents need to be able to future-proof their business to match these new regulations.
The When You Move platform already has the functionality to allow referrers to choose a zero-value referral at the transaction level. In addition, our technology also allows decision makers within businesses to choose a zero-value referral fee at the account level, to ensure that their negotiators will be compliant with these regulations if the ban on referral fees comes into effect.
This means that estate agents can future-proof their business knowing that the When You Move platform has the functionality and capability to quickly adapt to any new regulations regarding referral fees.
A step in the right direction
Referral fees have always been a huge part of the industry. However, with increasing consumer dissatisfaction with current property processes, we support the Government regulations for disclosure as an initiative to improve the home buying and selling process. Along with other new regulations, it’s a big step towards creating a more transparent, faster, customer-centric industry. We’re confident that the When You Move platform is able to support estate agents in meeting these new regulations, as well as improving the overall customer experience with more transparent communication.
To future-proof your business, arrange a free demonstration of our platform here.