Mortgage brokers slam continued instances of conditional selling

The buyer has since lodged a complaint with the estate agency.

Related topics:  Mortgages
Rozi Jones | Editor, Barcadia Media Limited
11th August 2023
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"With Consumer Duty now in play, it’s hard to see how any organisation can conclude pressure tactics like these are in any way acceptable"

Mortgage brokers have responded to a potential incidence of conditional selling at a major UK estate agency chain.

A screengrab of the email, shared on Twitter by Chris Schutrups, shows a conversation from a branch manager at Connells to a potential buyer.

The branch manager says: "The offer was originally submitted to the solicitors along with all other offers and your offer was chosen based on the fact that you were using our in house mortgage services and we would be able to chase the sale progressively to a swift conclusion, the solicitors are in favour of this. As the circumstances are now changing we will have to re submit the offer along with all others again and refer back to you as soon as we have a decision."

According to Newspage, the buyer has since lodged a complaint.

Rhys Schofield of Peak Mortgages and Protection said: “Absolutely, this constitutes conditional selling in that the estate agent has agreed the sale on the condition of using their own mortgage broker, something expressly forbidden by The Property Ombudsman.”

Scott Taylor-Barr, director of broker Barnsdale Financial Management, added: "Section 9c of the Estate Agents Code of Conduct reads: 'By law you cannot make it a condition of passing on offers to the seller that the person wanting to buy the property must use services offered by you or another party. You must not discriminate, or threaten to discriminate, against a prospective buyer of the seller’s property because that person declines to accept that you will (directly or indirectly) provide related services to them’. The content of the email, as presented, seems to cross that line."

Michelle Lawson, director at Fareham-based broker, Lawson Financial, notes that: “This practice has sadly always gone on, and it is illegal to conditional sell, however, the estate agents' power gets misused and can be detrimental to the buyer and seller both procedurally and financially as nobody checks. Agents generally prey on the naive such as first-time buyers as they know that they are unlikely to know the process. Sadly, these things are rarely reported and rarely action gets taken so this keeps carrying on. Buyers and sellers should make themselves aware of the Estate Agents Code of Conduct from The Property Ombudsman Service, which details the process and how agents should act and this would enable them to call out these agents who give other good reputable agents a bad name.”

Meanwhile, Bob Singh of mortgage broker Chess Mortgages described the situation as “vulture marketing”, adding: “This poor client is faced with losing the property just because he’s not using the in-house mortgage broker. Absolutely deplorable".

Lewis Shaw, founder of Shaw Financial Services, was unequivocal: “To my mind, this is conditional selling. No matter how often we raise this issue, nothing is done about it. Certain estate agency groups either can't control what happens in their branches, or the culture is one where it's freely allowed, possibly even encouraged. We need to see proper penalties for those involved, and the FCA must take action to stamp this out. One thing is for sure: this falls foul of the estate agency code of conduct and highlights the need for financial services to be broken apart from estate agencies as clearly they are unable to self-regulate.”

Pat Bunton of Langley House also lamented the practice and urged the regulator to take action: “Groundhog Day. When will some of these firms actually take action to drive the rogues from their midst, or is it just commercially convenient to turn a blind eye? With Consumer Duty now in play, it’s hard to see how any organisation can conclude pressure tactics like these are in any way acceptable, even though, of course, they weren't before Consumer Duty. The FCA: are you watching?”

In a statement, Connells said: "At Connells any complaint received is investigated with upmost priority. In this instance, the matter reached a resolution for the client within 5 hours.

"An investigation into this email is underway, and if there is an instance of pressurised selling, Connells will take full and appropriate action. Pressurised selling is neither encouraged nor acceptable.

"We are proud to be able to provide a range of services, assisting customers with all aspects of their move and providing a high standard of service."

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