The OFT’s latest annual market study included a demand for the cost of selling property to come down. I am all for that. But the OFT chooses the easy target and blames the cripplingly high cost of property transactions on estate agents commission.
Now, I am not going to say that estate agents have a moral right to a fat commission. Far from it – commission rates are set by competition in a free market. Furthermore, commission rates in the UK are generally extremely low – on the Continent, fees of six to ten per cent are commonplace.
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OFT ignores the fact it is the Government that gets the biggest cut from most property transactions in the form of Stamp Duty Land Tax, currently standing at 4 per cent for almost all the properties on sale in central London. That is £40,000 on a million-pound property for doing absolutely nothing.
Add in the unnecessary and counter-productive Home Information Pack (average cost: £400), the local authority search fee (up to £220), and the solicitor’s fee (£500 and upwards) and the estate agent’s commission begins to look rather reasonable.
On one thing I do agree with John Fingleton, OFT chief executive, when he says that he encourages home sellers to negotiate hard on commissions. We are always willing to negotiate, and I am confident that the process will show that Sandfords fees are highly competitive and that we work hard to earn our bread.
The OFT market study and accompanying research reports can be found at www.oft.gov.uk/homes.
