Agents misleading buyers about in-house mortgage services, says Which?

News at Property Ladder Devon | 16/07/2018

The consumer group Which? says some estate agents are misleading buyers about in-house mortgage services. 

The consumer group has issued a number of reports on this issue in recent years, and the latest involved researchers posing as first-time buyers in high street estate agencies.

Some 27 per cent of agents said that using their in-house mortgage broker would make a difference to the property purchase, with one claiming it could help the buyer get their chosen home at a lower price. 

The group says that 29 agents’ were targeted by the undercover team during April in Birmingham, Colchester, Maidenhead and Maidstone. Of the 22 that offered in-house mortgage-broking, none said buyers had to use them. 

“However, three said that their in-house broker would get the buyer better deals than they’d find elsewhere, and one said it would make the homebuying process quicker. Six estate agents told our researchers that using their in-house broker would make a difference to their purchase – and one even said that the seller might accept a lower offer: says Which? 

The organisation says the reasons given for an in-house broker making a difference to their purchase included the sale not falling through “so you’re in a better position”; that it would be quicker to get a mortgage or to complete the purchase; that the agent could more easily keep an eye on progress; and that vendor clients were more likely to accept an offer from buyers getting their mortgage in-house.

“Our undercover researchers also asked whether the agent would receive a referral fee or commission if they used the recommended broker. Half of the agents said they would, six said they wouldn’t, and seven were unclear.”

Which? adds: “Alarmingly, 17 per cent claimed their agent had told them they wouldn’t be allowed to go on viewings unless they used the in-house broker.”

A previous Which? survey revealed that 17 per cent of those who’d used in-house brokers had done so as a condition of being allowed to view properties.