A Money Marketing investigation has found four major estate agents giving out incorrect and misleading information to prospective borrowers on how much it would cost to use a mortgage broker.
Money Marketing app-roached Connells, Countrywide, YourMove and Spicerharrt, posing as a first-time buyer, and asked the estate agents about being referred to a broker and how much the fee would be.
The mystery shopping exercise found estate agents’ consultants confused the broker fee with the lender’s arrangement fee and insisted all brokers charge fees, which is not the case.
Connells charges a £399 broker fee on application but when asked if there is a charge at any stage before completion, a consultant replied: “No, no, no, no.”
YourMove charges a £399 broker fee. A consultant said: “It is basically an arrangement fee so even if you went directly through a bank or lender it would still be an arrangement fee they charge. For the actual advice it is free of charge.”
Spicerhaart refers customers to local brokers with fees set on a case by case basis.
Asked whether all brokers charge administration fees, a consultant replied: “Exactly, they all charge.”
Countrywide charges broker fees of £249 for residential mortgages and £499 for buy-to-let mortgages when mortgages complete.
An agent said: “It is pretty much an arrangement fee. The appointment itself is no fee no obligation. You have got nothing to lose. I believe there are arrangement fees of varying cost with the different banks.”
London & Country is a fee-free broker. Associate director of communications David Hollingworth says: “It should be straightforward from the start whether you charge a fee or not. There are plenty of tricks estate agents use to wrestle business away.”
YourMove admitted the information was given in error and it will be addressed internally. Connells and Countrywide declined to comment.
Spicerhaart’s financial services division, Just Mortgages managing director Antony Lark says: “We do charge fees and we disclose that to our clients from the outset. With regards to the statement that all brokers charge fees, we take this matter very seriously and will investigate internally and deal with it as appropriate.”