Estate agents organisation reiterates that it's a bad practice
Following reports that cases of conditional selling are increasing again, more brokers have come out to share their views on the alleged practice .
Some estate agents are reported to be pressuring clients to use their agencies’ in-house mortgage brokers rather than using an adviser of their own choosing.
Propertymark, the leading organisation for estate agents, reiterated that conditional selling was bad practice.
Mike Staton, director at Staton Mortgages, claimed he had experienced it himself, but accepted that only some agents were involved.
Staton remarked. “Forcing clients to see their in-house broker or use their in-house solicitor can be detrimental to a client, but is also an illegal practice. If Man City played Man United, I wouldn't want a Man United fan refereeing the match. How on earth can they be impartial? That’s the same as in-house brokers.”
Staton said that brokers that allowed this to happen needed to be held accountable too.
Craig Fish, founder and director at Lodestone Mortgages and Protection, recognised the prevalence of the controversial practice in the mortgage industry today.
“Unfortunately, conditional selling is an all too regular occurrence, and it seems to be getting worse,” he said. “I fear that more is to come as agents start to see a downturn in purchase transactions and try to maximise revenue and profit from as many avenues as they can.
“There is nothing wrong with agents recommending mortgage advisers that they work with, but to not put offers forward unless a client speaks with the agent’s broker, is disgraceful, dishonest, and illegal – and it needs to stop.”
Read more: Access FS targets estate agents undercutting brokers.
Fish related that it had happened to him twice in the past month alone, and on both occasions, he lost the client as they felt pressured to use the agent’s broker.
“What made this worse was that the agent’s recommendation didn’t fully take into account the client’s circumstances, and when the client challenged them, they were asked what mortgage I had proposed and then offered it,” he said.
“Estate agents need much stricter regulatory control, otherwise their underhanded ways will continue to get worse. The people that suffer are ultimately the people who the agent is supposed to be acting for.”
Imran Hussain, director at Harmony Financial Services, agreed that the problem seemed to be getting worse, but acknowledged that this was inevitable as the property market started to slow and transactions dropped off.
He said: “Not enough has been done to stamp out this practice and until it is, it will continue and the only person who loses out is the client. It makes a mockery of the house buying process.”
Lewis Shaw, owner and mortgage broker at Riverside Mortgages, stressed: “This malpractice will continue until there is a much bigger stick, especially when the carrots are so valuable,” he said. “All we can do as brokers is call it out when it happens, and begin to name and shame, so consumers can make an informed choice on who they do business with.”
Meanwhile, Propertymark – the leading organisation for estate agents with 17,500 members in the UK – reiterated its position on the subject of conditional selling.
“Conditional selling is bad practice,” Nathan Emerson, chief executive at Propertymark, said. “Agents have a duty of care for their vendors and part of that process is carrying out financial verification and anti-money laundering checks to ensure the suitability of buyers.
“If an agent has an in-house broker or advisor, it makes sense that they carry out those checks. But an agent absolutely cannot withhold or block any offer made, and if a buyer can provide all the necessary details from a reputable and verifiable outside source, then there should be no issue.”
