The murky world of estate agent fees | Money | guardian.co.uk

The murky world of estate agent fees | Money | guardian.co.uk

Partners at Knight Frank, the upmarket estate agency, have trousered bonuses worth half-a-million pounds and more in further evidence (if, indeed, any more were needed) of the grotesque state of Britain's property market.

The partners will share a bonus pot of £73m after the firm reported profits up by 10% in the year to March. Knight Frank no longer discloses how many partners it has, although in 2010 the bonuses were reported to be worth £600,000 a head.

It comes at a time when the number of properties sold in the UK is running at less than half the peak level in 2007; when properties are taking longer and longer to sell; and when first timers are being squeezed out of the market by landlords. The average flat in London now goes for £237,000 in a city where average wages are a fraction of that. As campaigners at PricedOut point out, that means a deposit in the region of £25,000 and a mortgage of about six times a typical London salary. Little wonder so few young adults are getting on the property ladder.

But Knight Frank doesn't sell the type of property you and I live in. Along with Savills it is an agent to the rich, marketing the likes of this £75m 12-bed pad in Holland Park. Property experts are fond of saying there are thousands of mini-property markets across the UK, but in reality there now seem to be just two: London, and the rest of the country.

One of the odder features of the capital's property market is that some agents have been raising their fees since the onset of the financial crisis. Foxtons won't negotiate below 2.5%. The likes of Knight Frank and Savills don't disclose their fees, but it is likely to be close to that, or more. .....