Referral fees don't harm consumers

There is no evidence that referral fees have caused consumer detriment within the conveyancing market, according to an economic analysis commissioned by the Legal Services Board.

 

The report stated that there was no evidence that referral fees have led to a decline in the quality of work or to increases in price.

Studies show the average conveyancing fee when a referral fee is paid is £543, while the average price paid by consumers when no referral fee is paid is £687.

 

The report said that while referral fees have risen from around £50 to £100 in 2004, to £259 to £400 today, conveyancing prices have remained broadly constant.

It found customer satisfaction was high among those who use referrals from estate agents, with 90% stating performance was better than others used in the past.

 

Firms have greater certainty in the volume of work they receive, so they have invested in technology to increase their efficiency, and these efficiency gains are passed on to the consumer.