As the housing industry continues to evolve, estate agents are increasingly coming under fire for charging too much and not keeping up with the times.
The high levels of commission charged by traditional high street estate agents has been ranked as the second biggest example of “daylight robbery” by today’s homeowners, in a survey carried out by Research Without Barriers on behalf of hybrid agency Emoov.
With the average commission for agents now 1.3% for selling a property, coupled with today’s high house prices, almost half (48%) of those surveyed feel that they are not getting good value for money from estate agents. The top answer in the study, which was not specific to the housing industry, was the price of a glass of wine in a trendy wine bar, while the average UK house price of £228,384 was also on the list.
Sign of the times
The figures show that it is selling houses rather than buying them that poses the biggest issue for today’s homeowners, according to Emoov founder and CEO Russell Quirk.
He added: “It makes sense as the average 1.3% commission charged by high street estate agents is by far the largest example of daylight robbery in terms of the actual monetary sum and it also demonstrates a sign of the times and a change in the consumer mentality across the UK property market.
“We’ve seen the industry evolve and like many sectors, technology has allowed estate agents to reduced overheads and increased service levels, passing the savings back on to sellers, so the idea of still paying thousands for nothing more than the upkeep of a traditional agent’s high street office is pretty ridiculous.”
Moving online for better value?
There has been a huge rise in the use of online estate agents in recent years as people look for cheaper, more modern alternatives away from the old high street model, with the likes of Emoov and Purple Bricks increasing their market share. Purple Bricks works on a fixed fee rather than commission basis, which can save the seller money, and everything is done online with the option of paying extra for a local agent to organise viewings.
However, many sellers and buyers still prefer the traditional model, where there is an office they can physically go to to meet the agents, sign documents and build trust and rapport compared to doing it online.
Estate agents have been put further under the spotlight recently after the government announced that it would be upping its funding for the National Trading Standards Estate Agency Team by an extra £279,000 after the number of complaints received about rogue agents had quadrupled since 2014, sparking a government crackdown on the industry.