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Pressure from estate agents to use in-house advisers harming consumers

Home-Houses-Different-Mortgage-Rent-700.jpgPotential homebuyers are being pressured by estate agents to use their in-house mortgage and conveyancing teams, leaving some able only to access advisers with restricted lender panels.

An investigation by Money Marketing’s sister title, Mortgage Strategy, found dozens of cases of customers across the UK being pressured or ordered to use estate agents’ in-house staff, sometimes before being allowed to view or put offers on houses.

Mortgage brokers mainly link the practice to branches of large estate agents such as Countrywide and Connells and some of their subsidiaries.

However, some smaller estate agents also put pressure on customers in the same way, according to those interviewed by Mortgage Strategy.

Hard sales tactics affect housebuyers by locking them in to using advisers with restricted lender panels, meaning they may not access the best mortgage deals.

For example, Connells and Countrywide both operate restricted panels; they would not reveal their lenders when asked.

If consumers feel forced to use estate agents’ financial services, this can also mean they pay more than they would if using rival services.

Some brokers say the total fee cost for consumers can be hundreds of pounds more than market norms.

Countrywide and Connells both deny pressurised selling.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Have we returned to the 1980’s.

    This was justified as part of a due diligence to ensure the buyer could afford to purchase. It also meant that offers from those that did not use their services were not put forward.

    In those days estate agents belonged to life companies who brokerage was a ‘tied agent of, for example L&G.

    This was the age of the endowment too.

    “Countrywide and Connells both deny pressurised selling”.

    “Well he would wouldn’t he” was the reply to Mandy Rice Davies’s defence barrister at an infamous trial in 1963, who put it to her that one of the men on a certain list that she had slept with, Lord Astor, had denied any involvement with her.

    Countrywide and Connells take note, I am sure the regulator has along with the OFT.

  2. As someone working in the highly regulated world of retain investing, I still can’t understand how practices like this can happen.

    Invariably taking on large levels of debt to purchase, often in cases where the purchase is to invest, and yet the ‘Agents’ seem to be acting in their own best interests.

    A interesting chapter in the book ‘Freakonomics’ demonstrates one conflict of interest between Agents and sellers. This one seems much more serious.

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