Estate agent fees – Homeowners pay £3bn in 2013

During 2013 UK homeowners paid out more than £3bn in high street estate agent fees.  London homeowners alone paying agents almost £1bn, according to research carried out by online estate agents Housesimple.

According to HM Revenue and Customs, the total number of properties sold in the UK during 2013 was 1,071,220. And using average house price figures from the Nationwide House Price Index, the average price of a UK property sold in 2013 was £169,043.

Housesimple.co.uk has calculated that taking 1.75% as the average percentage-fee charged by estate agents on a house sale, that the total amount of fees paid out by UK homeowners to high street estate agents during 2013 was a staggering £3.2bn.

The London area tops the estate agent fees chart. An average price of a London property in 2013 was £325,414 with the number of properties sold during 2013 at just under 88,000. The total amount of percentage-based fees paid to London estate agents was almost £600m. On average this was more than 12 times the total amount of agent fees paid by home sellers in Bristol (£49m).

Seven cities in the UK are recorded to have estate agent fees topping more than £20m; London (£599m), Bristol (£49m), Manchester (£32m), Liverpool (£28m), Birmingham (£27m), Nottingham (£23m) and Leeds (£22m).

Due to the expense of many estate agents, homeowners are now turning to online estate agents to sell their property. Online estate agents charge a fraction of the fees compared to high street agents and offer an identical service, providing professional valuations, photos and floor plans, through to managing viewings and negotiating with buyers on behalf of the seller.

A comparable example is supplied by Housesimple.co.uk, if all 1,071,220 properties sold in 2013 were sold through an online estate agent, homeowners could save around £2.6bn in fees.

Homeowners who sell through Housesimple.co.uk, save on average £5,207 in fees compared to selling through a high street agent.

Alex Gosling, managing director of Housesimple.co.uk, comments:

“These figures are staggering. Homeowners lined estate agents’ pockets to the tune of £3bn last year, and in London particularly, where properties in many areas are selling themselves, there is no need to be paying such high fees to sell a property.

“Despite the fact that the majority of property searches now start on property portals such as Rightmove and Zoopla, homeowners are still paying through the nose to sell through traditional estate agents.

Post courtesy of Financial Reporter.