Estate agents’ fees increase by more than £550m in less than 2 years
UK homeowners could have saved over £3.5b* in 2014 by ditching traditional high street estate agents and opting to sell their homes over the internet instead.
The staggering saving, which has been calculated by My Online Estate Agent, is in part due to the rise in estate agents’ fees, which have increased by £553m* in the last two years because of rising property prices.
MOEA is one of the new breed of online agents threatening the traditional high street model, by offering to market and sell UK homes at a fraction of the cost whilst maintaining the highest levels of professional service.
To date, it has sold more than 1000 properties since 2012 and has saved its customers more than £4m in total fees.
The high street versus online battle is continuing to escalate as consumers become more confident and sophisticated when buying and selling online and realising the savings on offer.
Online estate agents typically charge a one-off fee as little as £349. In comparison to the typical 1.5% charged by high street agents, the average individual seller could save approximately £2,900* by selling online.
This significant saving is possible as online agents don’t have to fund chains of offices, large staff payrolls and commission for sales staff. Although costs may be lower, MOEA maintains a high level of customer service, often praised for this by its customers.
Traditional high street estate agents have also come under fire recently as it’s not just their fees on the up. There have been a growing number of customer complaints recorded this year .
The rising costs and complaints have added fuel to the predictions that just as travel agents were disrupted by the rising popularity of online holidays, estate agents will go through a similar experience.
Just a decade ago, the percentage of online sellers was virtually zero, but this has already risen to 5 per cent and is predicted to increase to over 50 per cent in the next four years, and to as much as 70 per cent by 2020.
Online agents provide the same service you get on the high street, such as arranging viewings, taking pictures, creating floor plans and negotiating with buyers. House-sellers will often be required to conduct viewings themselves. However, a recent YouGov survey showed that over half of Britons prefer this approach, rather than having to arrange keys and mutually convenient viewing times with high street branches. In order to support customers who prefer viewings to be conducted by their agent, MOEA is finalising arrangements to offer this service.
David Grundy, CEO of My Online Estate Agent, said: “Over 90 per cent of property buyers browse the internet when on the hunt for their new home, so it’s no wonder sellers are starting to cut out the middle man and opt for online agents, who can put them in the same online hot spots, such as Rightmove and Zoopla, but without the hefty price tag.
“Traditional estate agents will always have a place in the market for specialist sellers, such as those with unusual properties. But, the ‘no commission, no commitment’ promise offered by online alternatives – especially when coupled with excellence in customer service – is becoming increasingly popular with sellers who want the power to control the sale of their homes themselves and reap the financial rewards”.
My Online Estate Agent charges an upfront fee which start from as little as £349 plus VAT for its full service. It offers exactly the same service you get on the high street, but managed from a central location. It is run by a team of experienced estate agents and regulated by the property ombudsman. For more information visit www.myonlineestateagent.com
For further information, please contact:
Laura Harris or Laura Salisbury, Influential
Harris@thisisinfluential.com / Salisbury@thisisinfluential.com
0151 239 5000
Notes to Editors
* UK homeowners would have saved up to £3.5b* this year
No of UK properties sold past 12 months – 1,229,470 (*www.gov.uk)
Average house price – £190,000 (*www.ons.gov.uk)
EA commission (1.5%+VAT) (1.5% of £190,000) £3,420
Paid in 2014 to EA (£3,420 x 1,229,470) £4 billion (£4,204,787,400)
Average online estate agency fee £521 (*My Online Estate Agent comparable fee, incl VAT)
Paid to OEA £521 x 1,229,470 £640,553,870
Total saving- £4,204,787,400 – £640,553,870 £3,564,233,530 (£3.5b)
(Average price saved by individuals £3,420 – £521 = £2,899)
** Estate agents’ fees have increased by £553m* in the last two years
2 years ago average house price = £162k
Today average house price = £187k (averages from Nationwide and Halifax reports).
Increase = £25k
No of UK homes sold past 12 months 1,229,470 (*www.gov.uk)
Average EA commissions = 1.5% + VAT
Increase in fees = £25k x 1,229,470m x 1.5%+VAT = £553m