New guidance from Property Ombudsman to stop estate agents making home buyers use their mortgage broker
Quick Summary
Estate agents should not pressure or coerce buyers into using their in-house mortgage brokers or legal services. The Property Ombudsman has issued guidance confirming that buyers should not be forced to use the mortgage broker their estate agent recommends to have their offer accepted.
The Property Ombudsman has published new guidance to help home buyers recognise and avoid conditional selling, following the issues highlighted in the BBC Panorama documentary, Undercover Estate Agent.
The guidance reiterates that conditional selling, where an estate agent pressures a buyer into using specific services, such as its recommended solicitor or in-house mortgage broker, as a condition of accepting their offer, is prohibited under The Property Ombudsman’s Codes of Practice.
The new guidance aims to help consumers understand their rights and recognise when they may be experiencing unfair pressure or misinformation. If an agent insists that a buyer use its in-house or associated services, the buyer has the right to refuse and to expect to be treated fairly and reasonably.
Chief Ombudsman Lesley Horton said, “Conditional selling breaches our Code of Practice and has no place in a transparent property market. Estate agents must ensure that every buyer is treated fairly, with clear and honest communication at every stage of the process.
“Consumers should be able to trust that estate agents are acting fairly and equally, not using unfair tactics to influence their choices. Our new guidance is designed to provide home buyers with clear information about their rights and to remind agents of their obligations under the Code of Practice.”
Home buyers are free to choose their own insurance provider, mortgage broker and solicitor, and all offers must be passed to the seller promptly, regardless of what service provider/s the buyer has chosen to go with.
The Ombudsman will continue to monitor complaints relating to conditional selling and work closely with the Government and industry bodies to promote best practice.
Do I have to use an estate agent's mortgage broker?
The simple answer is no. If you feel like you are being put under pressure to use an estate agency broker or legal firm, you may want to send them a link to this article to explain that it is not allowed and that it should not be happening.
Aaron Strutt, product director at Trinity Financial, says: "There is a fair chance their broker will do a good job, but you should have the option to shop around and go with the broker you think is the most efficient, trustworthy and offering the most suitable product."
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The information contained within was correct at the time of publication but is subject to change.
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