New Rules Mean You Could Save Thousands in Hidden Property Fees

Posted 17 December 2018 by Nick Parkhouse

New rules will make it easier to compare legal fees when you buy a property. Find out what these changes mean to you…

Recent research has found that Brits are paying thousands of pounds in ‘hidden’ property fees when buying a new home. The study has found that homebuyers end up spending more than £8,000 in unexpected fees, in addition to the deposit on their property.

The research comes in the month where new transparency rules aimed at helping homebuyers understand property fees have come into force. Keep reading about how hidden property costs can affect you, and why new rules should help you to better understand the cost of moving.

Brits paying more than £8,000 in unexpected property fees

A new study has found that there is a lack of transparency surrounding property transaction fees and that Brits are paying more than they expect when they buy a new home.

The data from digital conveyancing platform When You Move suggests that everyone from surveyors and conveyancers to estate agents are often less than transparent when outlining the costs of moving.

The survey found that Brits spend an average of £8,113 in unexpected fees in addition to their deposit. It also revealed that homebuyers end up borrowing almost £17,000 from parents and friends to cross the line and get into their new home.

The research found that one in five homebuyers have had to turn to friends and family to cover the cost of unexpected fees and that nearly a third feel they were ‘blindsided’ by the true costs of moving.

Other findings from the research include:

  • 18% of sellers hold off putting their home on the market to avoid the sting of fees.
  • More than a quarter of homebuyers would have pulled out of a purchase at the point they discovered the true extent of fees, but were unable to do so.
  • Brits spend an average £8,113 in unexpected fees in addition to their deposit.
  • A quarter of people didn’t factor in any additional costs when buying a property.
  • 31% of buyers lost a significant proportion of what they had saved for their deposit on unexpected fees.
  • One in four people felt their solicitor misled them in relation to the true extent of fees surrounding their legal services.

The research comes in the month that new rules come into force regarding property fees. From December 2018, all regulated law firms will be required to publish information on prices they charge for their services. Keep reading to find out more.

New transparency rules mean homebuyers can now compare conveyancing service and costs

New transparency rules have come into effect this December aimed at helping homebuyers understand the various costs and fees involved in buying a new home.

All property solicitors will now publish price, service and quality information on their websites (and in other formats). This is part of an industry push to give consumers more information and to encourage competition across the legal services and conveyancing market.

The Council for Licensed Conveyancers (CLC) has outlined what consumers can expect. All property lawyers will now have to display the following on their website:

  • Details of their service – this may include customer feedback, links to third-party feedback sites, and information on their current timescales for conveyancing.
  • Details of their costs and fees – this should be displayed prominently, and include examples of fees covering a wide range of services and different types of transaction.
  • Regulatory information – you should be able to see immediately which body regulates the company. If the firm is regulated by the CLC then the CLC logo should be displayed prominently.
  • Their complaints process – full details of the company’s complaints procedure should be available, including details of the Legal Ombudsman and redress information.

Stephen Ward, CLC Director of Strategy and External Relations says: “The process of buying a home can be exciting and stressful in equal measure.

“The legal market is changing so consumers have the information they need to find the best advisers for them and we at the CLC are determined to lead the drive for transparency and to improve the homebuying and selling process overall.

“Consumers should feel confidence in shopping around to find the conveyancer who will best suit their needs,” he added.

Solicitors will have to share referral fee information

Research by the CLC has shown that most homebuyers choose their conveyancer or solicitor as a result of a direct recommendation from their estate agent.

However, most people don’t realise that the estate agent then receives a fee for the introduction, which can be up to £100-£300 per client.

As part of the new rules, solicitors also must highlight any referral arrangements that are in place. A solicitor must also provide details of the range of fees that they pay to other companies for referrals.

Sheila Kumar, chief executive of the CLC, says: “We are not saying that it is wrong for conveyancers to pay referral fees, but transparency is key. It is important that the client is aware of the payment of referral fees before deciding who to appoint.”

 

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