Referral Fees Under Review: What Agents Need to Know

The CLC opened a review of conveyancing referral fees in 2026 after a Panorama programme on conditional selling. What is in scope, what is likely to change, and how to prepare.

Propelr Editorial Team10 min read

What you need to know

Referral fees remain lawful but are under active scrutiny. The Council for Licensed Conveyancers began a review in 2026, prompted partly by a BBC Panorama programme on conditional selling, and CILEX has called for an urgent review alongside its backing for RoPA. A ban looks unlikely; tighter disclosure and stronger enforcement against conditional selling look probable.

  1. Referral fees are lawful but must be disclosed under the Estate Agents Act 1979 and consumer protection law.
  2. The CLC opened a review in 2026 following a BBC Panorama programme on conditional selling.
  3. Conditional selling — implying an offer fares better if in-house services are used — is already unlawful.
  4. Typical fees are £200–£400 per case, recovered through client fees or higher caseloads.
  5. The likely outcome is tighter disclosure and enforcement rather than prohibition.

Referral income is a meaningful revenue line for many agencies and it is under more scrutiny in 2026 than at any point in the last decade. Nothing has changed in law yet. The direction of travel is clear enough to plan around.

What is happening

The Council for Licensed Conveyancers began a review of referral fees in the conveyancing profession during 2026. The immediate trigger was a BBC Panorama programme on conditional selling — agents steering buyers towards in-house services — which put the incentive structure behind referrals in front of a mainstream audience.

In parallel, CILEX has publicly backed implementation of the Regulation of Property Agents proposals and called for an urgent review of agency referral fees. The two threads connect: the CLC has suggested that regulating estate agents would deal with the underlying concerns better than restricting fees in isolation.

That is a meaningful signal. It points towards RoPA as the intended remedy rather than a prohibition on referrals.

The current legal position

Referral fees are lawful. The obligations attached to them are:

  • Estate Agents Act 1979 — an agent must disclose any financial interest in a recommendation
  • Consumer protection law (DMCC Act 2024) — failing to disclose can be a misleading omission
  • Redress scheme rules — both approved schemes require transparency about referral arrangements

The standard is not merely that a disclosure exists somewhere. It should be prominent, in writing, and made before the customer commits — not surfaced afterwards in terms of business nobody reads.

Conditional selling: the sharper risk

Worth separating clearly, because it is already unlawful and carries the greater exposure.

Conditional selling is making — or implying — that a buyer's offer will be treated more favourably if they take the agency's mortgage, conveyancing or survey services. It breaches the Estate Agents Act 1979 and consumer protection law.

The line is not always drawn where staff think it is. Lawful cross-selling offers a service on its merits. Unlawful conditional selling leaves the buyer believing that declining will disadvantage them. Phrases like “the vendor prefers buyers who use our in-house team”, or requiring a financial qualification appointment before an offer will be put forward, sit on the wrong side of it.

Worth auditing how offers are actually presented to sellers as well. If in-house-serviced offers are consistently framed more favourably, that pattern is discoverable.

Why critics link referral fees to service quality

The transparency argument is the one usually made. There is a second, and it explains why conveyancers have become vocal.

A referral fee of £200 to £400 per case has to be recovered. A panel firm can do that by charging the client more, by running higher caseloads per fee-earner, or both. Since caseload is one of the better predictors of how quickly a firm responds, critics argue referral arrangements systematically push clients towards firms with less capacity to give them attention.

That is the argument. Panel firms can be perfectly competent, and many are. But the recommendation is not independent, and sellers are entitled to know that. See the seller-side view of recommended conveyancers.

What is likely to change

OutcomeLikelihood
Tighter, more prominent disclosure requirementsHigh
Stronger enforcement against conditional sellingHigh
Referral arrangements addressed through RoPA regulationModerate to high
A cap on referral fee amountsPossible
Outright banLow in the near term

What to do now

  1. Audit your disclosure. Is it in writing, prominent, and given before the customer commits? Does it state the amount?
  2. Audit staff behaviour and incentives. If negotiators are bonused on in-house conversions, you have a conditional selling risk whether or not anyone intends one.
  3. Review how offers are presented. Sellers should see offers ranked on strength, not on who serviced them.
  4. Quantify your exposure. What share of revenue is referral income, and what happens if it halves?
  5. Consider the alternative model. Agencies increasingly compete on transaction speed rather than referral income — a faster pipeline converts more commission and is not regulatorily exposed. See protecting commission.

Sources and further reading

  • Council for Licensed Conveyancers— Referral fee review, 2026 (clc.gov.uk)
  • Estate Agents Act 1979— disclosure of personal interest (legislation.gov.uk)
  • Digital Markets, Competition and Consumers Act 2024 — misleading omissions (legislation.gov.uk)
  • Propertymark— RoPA and professional standards (propertymark.co.uk)

Related guides

Frequently asked questions

Are estate agent referral fees legal?

Yes. Referral fees paid by conveyancers to estate agents for introductions are lawful, but they must be disclosed. Under consumer protection law and the Estate Agents Act 1979 an agent must disclose any financial interest in a recommendation, and failing to do so can be a misleading omission or an undisclosed personal interest. What is under challenge is not legality but transparency and the incentives they create.

Why are referral fees being reviewed?

The Council for Licensed Conveyancers began a review in 2026 prompted in part by a BBC Panorama programme on conditional selling — the practice of agents pushing buyers towards in-house services, sometimes with an implication that using them improves the chance of an offer being accepted. CILEX has separately called for an urgent review of agency referral fees alongside its support for RoPA.

What is conditional selling and is it lawful?

Conditional selling is making, or implying, that a buyer's offer will be treated more favourably if they use the agent's in-house mortgage, conveyancing or survey services. It is unlawful — it breaches the Estate Agents Act 1979 and consumer protection law, and both Trading Standards and the redress schemes treat it seriously. The distinction from lawful cross-selling is whether the buyer is left with the impression that declining disadvantages their offer.

How much are conveyancing referral fees typically?

Commonly £200 to £400 per case, though they vary and can be higher on volume arrangements. The economics matter to the debate: a panel firm paying that per referral has to recover it, usually through a higher fee to the client, a higher caseload per fee-earner, or both — which is why critics link referral fees to service quality rather than only to transparency.

Will referral fees be banned?

A ban does not look imminent. The CLC has suggested that regulating estate agents would address the underlying concerns more effectively than restricting fees in isolation, which points towards the RoPA route rather than prohibition. The realistic near-term outcome is tighter and more prominent disclosure requirements, and stronger enforcement against conditional selling.

What should an agency do now?

Audit three things. First, whether your disclosure is prominent, in writing and made before the customer commits rather than buried in terms. Second, whether any staff behaviour or incentive structure could be read as conditional selling — including how offers are presented to sellers. Third, what share of revenue depends on referral income, so you know your exposure if the rules tighten.

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