Which? criticises mortgage brokers

More than 90% of mortgage advisers investigated in a Which? Money probe were caught giving poor quality advice.

In its undercover probe, Which? checked 50 mortgage advisers and found 41 failed to provide one or more pieces of key information, while 35 didn’t do a proper check to ensure borrowers could afford to repay the mortgage.

Two-thirds also tried to sell insurance at the same time, often for an unsuitable product and many failed to tailor their advice to the customer’s needs. Which? Money’s undercover researchers visited banks, estate agents and independent mortgage advisers across England and Scotland posing as first-time buyers who wanted advice and a recommendation.

Which? Money spokesperson Martyn Hocking said: “Listening to people’s needs and giving tailored advice should be the bread and butter of a mortgage adviser’s job, but too many of the advisers that we visited took a ‘one size fits all’ approach or seemed as concerned with selling an insurance policy on the side.

“With mortgage costs soaring and the spectre of negative equity returning to the property market, it’s important that people get help to find the right deal.

“There are still more than 3,000 mortgage deals out there, and the difference in cost can be thousands of pounds a year, so it’s vital people do their homework and choose their adviser with care.”

Chris Cummings, director general of the Association of Mortgage Intermediaries, said: “First and foremost, Which? says that consumers should always speak to an independent mortgage adviser.

“However, it would have been beneficial had the report clearly distinguished in its findings between the actions of independent advisers and those who sell products. We do welcome the support from Which? for independent advice and also its view that lenders will best serve consumers if they offer their best deals through advisers.

“We are grateful that within the report Which? highlighted for consumers the difference between sales and advice. Consumers must be made aware what they are receiving. Independent mortgage advisers provide advice that is wholly focussed on the individual consumer’s needs. In contrast, banks and building societies may offer only generic information. Our recent research showed that 8 in 10 consumers chose to use an intermediary precisely because of the value of advice.

“During difficult periods in the market, consumers need advice more than ever.”