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Many estate agents are illegally forcing customers to use their in-house mortgage advisers rather than independent mortgage brokers.
According to a study from the Office of Fair Trading, homebuyers are being pressured into taking out a mortgage via the agent’s adviser and some are even told that their offer won’t be considered if they arrange a mortgage independently.
Agency staff may be tempted to indulge in these practices as it gives them the opportunity to earn extra commission, even though it is illegal.
There is no guarantee that homebuyers will end up with the most suitable mortgage, as estate agent’s advisers may only use a limited panel of mortgage lenders.
Mortgage broker Aaron Strutt said of this “industry-wide problem”:
“In-house mortgage advisers may not be independent or whole-of-market so they only have a limited number of deals, potentially leaving buyers worse off.”
Complaints lodged against estate agents have increased significantly this year. Consumer advice service, Consumer Direct, says that between January and October of this year it has received 3,565 complaints about estate agents, marking a 10% rise on the same period in 2008.
The OFT report revealed that one in 20 homebuyers who had arranged finance for their property purchase via the estate agent’s adviser had been informed that they had no choice but to use this route if they wanted to get the property of their choice.
Rob Davies explains how best to use the Internet to get a good mortgage deal
The January/February 2010 issue of Your Mortgage is on sale now. In it we look at what's in store for the mortgage and housing markets this year; we examine the Government schemes available to help first-time buyers, advise on coping with negative equity and analyse buying property in Italy. We also profile the winners of our annual Your Mortgage Awards. Get your copy for the latest news, information and help.
The Your Mortgage Awards aim to reward those lenders that have excelled in providing innovative and competitive products. Widely regarded as the UK's definitive consumer mortgage awards, the Your Mortgage Awards have now been running for 20 years.





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