Estate agents in the UK are earning a combined £3.5billion a year in fees according to analysis of data in the public realm carried out by eMoov.
Polling for the online agents reveals that very few house sellers know where this money goes. Most respondents estimated that agents spend between ten and twenty percent of their fees on marketing and advertising, though the reality is that a mere 6% of fees are spent on promotion according to eMoov’s analysis.
In the period from 1 August 2013 to 31 July 2014, estate agents sold 944,445 properties across the UK with an average sale price of £243,736, meaning the total value of UK residential property sales during this time topped £230 billion.
With typical fees of 1.5% of the transaction price, estate agents earned £3,453,111,500 during this period.
In London, sale prices were more than double the national average. The average price for a house in London last year was £503,298, the highest in the country. This was followed by South East England with an average of £299,925. Despite having higher prices than anywhere else in the country, both areas saw more transactions than other regions, with 162,000 sales in the South East and 108,000 in London.
Estate agents in London alone earned nearly a quarter of all agents’ fees in the entire country, making an average of £7,549 per transaction and around £817,750,000 in total in the last year alone.
Russell Quirk, CEO of eMoov, said: “Reaching potential buyers is easier and cheaper than it has ever been with the online tools available. You can get hundreds of people previewing a property for not much more than the cost of a postcard in a newsagent’s window.”
Despite this, in a surprise and backward move, a consortium of London based estate agents, Agents Mutual, have announced plans to create their own property portal site. In their terms and conditions they are creating a ‘gated community’, restricting the number of other sites on which any particular property can be listed.
The three main portal sites, Rightmove, Zoopla and Primelocation, were named by 74% of consumers as the most useful sources of information when buying or selling a property. Local estate agents sites were only named by 14% of consumers as most useful.
The Agents Mutual proposal has been criticized by Russell Quirk of eMoov. He said: “Clearly concerned that £3.5billion a year isn’t quite enough for them, a bunch of estate agents have decided to launch their own portal site to feather their already well-feathered nests. Agents Mutual will restrict choice and slow down the sales process. It works against the interests of the customer and benefits only the estate agents themselves. With an annual £3.5bn wage slip, I’m not sure many buyers or sellers will be too impressed with these estate agents trying trouser even more cash by setting up their own site and paying themselves to list their properties on there.”
