A new analysis of property sales expenses suggests that landlords who sell now are paying up to 21% more in estate agency fees than they were five years ago.
Open Property Group has analysed the change in average estate agency fees in the UK and its regions between 2019 and 2024 to reveal how the cost of selling a home has changed.
In 2019 the UK’s average house price was £230,612 and the average estate agency fee was 1.53%.
As such, the cost of agency fees in 2019 was an estimated £3,528.
Fast forward to today and the average UK house price is £280,311 and the average estate agency fee has fallen to 1.42%.
But due to the increase in house prices, the pounds-and-pence cost of the fee has actually risen to £3,980. This is a five-year increase to the seller of 12.8%, or £452.
However, due to vast regional variations in average house price, there are some parts of the UK in which sellers have seen the cost of agency fees increase significantly more.
In the North West, the average house price has increased from £164,419 in 2019 to £214,592 and the average agency fee has increased from £2,516 to £3,047, This is equivalent to a cost increase of 21.1% for sellers.
Hefty cost increases have also occurred in Northern Ireland where fees are up 20% on 2019 levels, followed by Wales (19.4%), Yorkshire & Humber (16.3%), the East Midlands (15.6%), Scotland (14.8%), West Midlands (14.9%), South West (14.4%), and North East (14%).
Meanwhile, London is the only place where the cost of agency fees has fallen, having dropped 0.5% over the five-year period.
A spokesperson for Open Property Group says: “After a couple of stagnant years, it looks like the UK market is going to pick back up in the second half of 2024, which means house prices will rise pulling agency fees up with them.”
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And the point of the article is what exactly?
Costs have risen for estate agents.
Wages have risen considerably at the bottom end. Utility costs have risen.
Property sales have been a rollercoaster.
Estate agent fees are usually percentage based and that percentage has dropped so what's the problem?
Only if you are stupid enough to agree to them. We live in a world of the Internet and free market, there are numerous alternative ways to sell, gone are the days of being sat in some dingy office with a bloke in a cheap suit and twenty Bensons trying to flog you a flat over a takeaway in Peckham.
In most cases the 'cheap as chips' vendor approach rarely gets you the best price. I despair at people who want everything and everyone for next to nothing. You get what you pay for in life.
Personally I have no problem paying a higher fee if this achieves the best result.
The apparently cheap online agents have to make their money somewhere. I tried it myself and was quoted an unrealistic asking price and received persistent calls about solicitors and mortgages when I had made it clear I already have my own arrangements. They are very persistent, I even received paperwork suggesting I had agreed to use their solicitor, which I had not. Also same story at properties I have viewed, that are generally wrongly priced, and the vendor who shows you round tells you all they want is for you to use their additional services.
I am willing to pay 1% plus VAT for a proper service with a local agent.
I've never understood why estate agents don't get creative and offer an escalator commission structure (they get a higher %age for securing a sale above asking price and a lower %age for below asking price).
That way, they are incentivised to actually do their job, which is to sell. And to value it correctly in the first place.
Sellers should be demanding this commission structure from agents, as it is a win-win if the house sells for more than asking price and the costs are softened if you are forced to accept a low offer.
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