Mortgages  

Estate agents cost five times more than IFAs

The founder of emoov.co.uk, who is also a councillor for Brentwood, Essex, provided research which showed that estate agents are effectively charging five times more than a typical fee-based financial adviser when per-hour costs are calculated.

Mr Quirk found that the average hourly fee at a physical branch would hit £774, considering homebuyers are typically charged 1.6 per cent on the value of their property and estate agents work an aggregate of 10 hours on the sale process.

That makes a typical estate agent £274 more expensive than the average lawyer, who charges £500, and more than three times as pricey as a private medical consultation, which is typically set at £250.

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A poll commissioned by the Association of Professional Financial Advisers last year found that the majority of fee-based advisers charge no more than £150 an hour.

Mr Quirk claimed many estate agents are raising fees due to booming house prices, meaning they are “charging more” for less work when it was becoming easier to sell properties.

He added: “The industry is becoming less regulated, in sharp contrast to the financial sector, and it is clear the government is hesitant to get involved.

“We need a licensing system whereby an individual or firm must have proven basic industry knowledge before they are let loose on this crucial cornerstone of people’s lives.”

Mr Quirk, whose website is backed by TV personality and entrepreneur James Caan, is just one figure from within the estate agent industry to support Financial Adviser’s campaign for tighter regulation and better consumer protection.

It follows the government’s controversial decision to transfer regulatory powers from the Office of Fair Trading to Powys County Council Trading Standards from 1 April.

Adviser view

Pete Mugleston, mortgage adviser at Derby-based OnlineMortgage Advisor.co.uk, said: “As a financial adviser, you are legally required to disclose fees up front, if you are authorised and regulated by the FCA, and that transparency should extend right across all industries overseeing major financial transactions.”