The growing number of estate agents who want an 'introduction fee' from house buyers

An estate agent's sold sign outside a property. Credit: Chris Ison/PA Wire

By Chris Choi: Consumer Editor

The UK's Property Ombudsman is today warning about a growing number of estate agents who are charging not just sellers - but also those purchasing homes.

Our research shows it's happening all over the country, involving hundreds of agents. The practice means that purchasers, who are already over-stretched, face more expense.

Christopher Hamer, the Property Ombudsman, told of the potential pitfalls of the 'introduction fee'.

What some of those struggling to buy a home most object to is that agents also get money from the seller via an "admin fee".

One buyer from Surrey told us that after a deposit, stamp duty and legal fees, to face an estate agent fee amounting to thousands of pounds was "crazy".

Here's how the sales tactic works:

Taking a £200,000 house as an example the seller would be asked to pay an "admin fee" to the estate agent of £180.

The buyer would be asked to pay a 2% "introduction fee" in order to purchase the property, through sealed bids.

Once VAT is added this comes to £4,800, which the buyer is asked to give the estate agent.

We found plenty of evidence that it's an increasing practice.

It is all perfectly legal and the agents involved say it extends choice. In a market of high demand for properties they see it as a way to encourage more owners to put their property on the market - because the seller only pays an "admin fee".

The agents deny any allegation of "double charging", saying the seller is paying so little.

Some of those who are concerned about the rise of this kind of fee say the industry's regulator should look into it. The problem is - there isn't one.

The Office of Fair Trading which used to co-ordinate enforcement of estate agency rules has now been disbanded.

Oddly, much of its role in keeping the industry on its toes has been given to Powys County Council - where I'm told three members of staff cover the whole country.

In today's sizzling property market it's likely that, once again, estate agents fees will become a hot issue.