Estate agent fees in the UK have fallen by 34% over the last seven years but half of those selling a home pay over the average amount, research has found.
The average fee is now 1.18%, excluding VAT, and British estate agents charge the lowest commission when compared to most major global locations, according to the research from home service group The Advisory.
For example, aged in France and the United States charge fees of 5%, while in Japan it is 6% and in Mexico it is 7.5%. Lower than the UK is Hong Kong at 1% and China at 0.5%
The research also found that in the UK over 95% of sellers choose a traditional high street agent over an online hybrid and sole agency is the most common fee structure chosen by the public.
It suggests that fees have fallen 34% since 2011 as high street firms have felt under pressure to compete for instructions due to market conditions and the rise of the lower fee online agents.
The survey found that 47% of sellers paid higher than the national average, with the majority paying 1.5% commission. 11% of sellers paid between 1.5% and 2%. Meanwhile, 95.3% of sellers chose to sell with a traditional high street estate who charge a ‘no sale no fee commission that usually includes all marketing materials and accompanied viewings, rather than an online hybrid who command lower fees upfront, with additional costs on top.
Sole agency agreements were the most common fee structure for 71.4%, followed by fixed fee for 19.1% and a multi-agency fee for just 4.8%. The firm says that this means less than 5% of sellers preferred an online agent to sell their home.
‘It’s sad to see so many agents dropping their fees in response to the perceived online threat. It’s also a mistake as the threat is far larger in the mind than it is in reality. Market share for hybrid agents is actually very low given the amount of money they’ve spent on marketing,’ said Gavin Brazg, founder of The Advisory.
‘Most sellers do not want cheap. They want the extensive local expertise and high professionalism of a bricks and mortar high street agent. As long as you can justify your fees and differentiate your service, our figures show many sellers are prepared to pay up to 2% plus VAT, if not more,’ he added.
Meanwhile, separate research show that traditional estate agent fees in Glasgow and Leicester average just 0.84% of the final house sale price, 0.26% less than the national average of 1.1%.
According to data from estate agent comparison experts NetAnAGent Edinburgh has the second lowest fees at 0.89%, followed by Hull 0.91% in third. London has the highest fees at 1.7%, followed by Sunderland in second 1.33% and Manchester in third 1.31%.
The highest fees are in London at 1.7%, followed by Sunderland at 1.33%, Manchester at 1.31%, Birmingham at 1.25% and Leeds at 1.18%.
The figures also reveal that, overall, traditional estate agent fees have fallen across the UK since 2016. Leicester saw the biggest reduction in fees going from 1.41% in 2016 to 0.89% in 2018, a drop of over 40%.
One exception is specialist agents selling properties in high-value areas like N1 in London which has seen a rise of 45% from 1.5% in 2016 to 2.18% in 2018.
‘It’s no surprise that, over the last few years, traditional agents have increasingly brought fees down to compete with online and hybrid agents,’ said Alex Thorpe, chief executive officer of NetAnAgent.
‘However, we have seen that high street agents have continued to evolve their service to justify the extra fees with more focus on service along with an emphasis on helping to manage the entire process from marketing to completion,’ he added.
