Estate agents in southern England are increasingly charging upfront fees to vendors in exchange for reduced commission rates at completion, as the property market experiences subdued activity.
According to industry sources, agents are charging approximately £300 as an upfront payment, which reduces the final commission by between £1,000 and £1,500 depending on property value. The fees are non-refundable if the property fails to sell.
The pricing model appears most prevalent among corporate-owned agencies and is being used particularly to secure instructions for properties previously marketed by rival agents without success.
Industry perspectives
Nick Kyriacou, managing director of North London agency MiHomes, said he does not support reduced commission structures. “They are reflective of low quality professional estate agency work,” he stated, adding that his firm does not charge upfront costs.
MiHomes has instead removed minimum sole agency periods, requiring vendors to pay marketing costs only if they terminate the instruction early. Kyriacou said: “I have seen three months, six months and even nine-month contract periods this year alone – it’s not consumer centric.”
Trade body response
Nathan Emerson, chief executive of Propertymark, acknowledged that various pricing structures have a place in the market but emphasised the need for transparency. “An upfront payment in exchange for a lower overall commission may suit some sellers, but it also transfers a greater degree of risk to the consumer if the property does not sell,” he said.
Emerson stated that Propertymark member agents are bound by professional standards requiring them to act in clients’ best interests and avoid misleading or high-pressure sales tactics. “Any agent recommending an upfront fee arrangement should be confident that it is appropriate for that individual client’s circumstances,” he added.
The trend reflects broader challenges in the property market, particularly in areas of southern England where transaction volumes remain below historical averages. While upfront fee models generate immediate revenue for agencies, they reduce potential earnings on successful sales, creating a trade-off between short-term cash flow and long-term profitability.
