Survey following Panorama investigation reveals borrowers concerns too
As talking points go, not many subjects - it seems - have dominated conversations between mortgage brokers like BBC Panorama’s investigation into alleged conditional selling at some UK estate agencies.
Few brokers seemed surprised, yet those agents who were accused have made fulsome denials. Certainly seeing the evidence presented so graphically on a primetime show has engaged fresh debate in the industry about how bad practice should be tackled.
The concerns aren’t just among mortgage brokers though – new research from Boon Brokers, prompted by last week’s Panorama programme, suggests that a majority of buyers and sellers surveyed are worried too, and reveals further evidence of conditional selling. Of the 1,000 people that Boon Brokers surveyed, 52% of respondents said they were strongly encouraged or required to use an estate agent’s mortgage broker, while 18% of respondents were told their offer would only be considered if they use an agency’s in-house mortgage broker. Furthermore, 78% of respondents believed estate agents should not have direct associations with mortgage brokers.
Revealing the survey’s findings, Gerard Boon (pictured), managing director of Boon Brokers, called for action to clamp down on conditional selling. “We urgently need clear, enforceable regulation of estate agents,” Boon told Mortgage Introducer.
Panorama’s undercover reporter got a job in an estate agency office, and during her six weeks there, claimed to have found evidence that the senior branch manager favoured prospective buyers if they were planning to take its in-house services. like conveyancing or mortgages, because it made more money for the company. The programme alleged that the agency referred to buyers who had agreed to take out a mortgage or a conveyancing package through the company as ‘hot buyers’. In one case, the programme suggested the company appeared to sideline a potential buyer for a £300,000-plus, three-bedroom house, possibly with a higher offer, in favour of someone else who had agreed to take out an in-house mortgage. That mortgage was said to be worth about £2,000 to the agency, and it stood to potentially make £10,000 in total by arranging add-on services and selling the buyer's property too.
The programme also investigated another brand, with a whistleblower alleging that staff were incentivised to get price reductions on properties - many of which, she was told by one of the company's local property agents, appeared to have been put on the market for more than they were worth. The whistleblower claimed that she was told that staff could earn commission if they persuaded sellers to drop their asking prices, and they were also under pressure to sell financial products like mortgages and conveyancing.
According to Boon Brokers’ follow-up survey, 85% of respondents did not know that estate agents are not governed by any formal body, and 96% believed stricter regulations for estate agents were necessary. Some 60% of respondents thought fair access to property viewings should be guaranteed regardless of which broker is used.
“Both the BBC’s investigation and our own research has highlighted that estate agents are often acting as both the gatekeepers to property viewings and the promoters of in-house financial products - this dual role creates a serious conflict of interest,” said Gerard Boon. “The findings are extremely worrying - not just because of how widespread these practices are, but because of what they reveal about the unchecked power estate agents hold in today’s housing market. Ultimately, it means that many buyers, especially first-timers or those unfamiliar with the process, are being steered away from independent financial advice and into arrangements that will likely not serve their best interests. Without regulation to separate sales from financial influence, the risk of mis-selling and inequality in the market will only grow.”
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Concerning but not surprising
While Boon found the Panorama investigating deeply concerning, he wasn’t surprised. “We’ve heard numerous first-hand accounts from clients who felt pressured to use an estate agent’s in-house mortgage broker,” he said. “Our team of brokers has consistently encountered clients who were denied property viewings, asked to verify affordability despite holding a valid agreement in principle, and, most alarmingly, told their offers wouldn’t be considered – simply because they chose to use an independent mortgage broker. The BBC’s investigation has provided national visibility to a problem many in the industry have quietly acknowledged for years. It’s a clear signal that these issues aren’t isolated, but systemic.”
How concerned is Boon, then, that bad practices such as the ones alleged by Panorama could have an adverse impact on mortgage brokers’ reputations more widely? “Very concerned,” he said. “The mortgage industry is one that is built on trust, transparency and consumer protection. When even a small portion of the sector behaves unethically, it inevitably damages the public perception and confidence in all brokers. When buyers are misled or feel coerced into using a particular broker, it undermines the integrity of the entire profession - especially if the coercion is in the interest of the company or firm’s own sales pipeline. These practices not only distort the homebuying process but also unfairly undermine honest brokers who are fully compliant with FCA regulations and committed to doing the right thing.”
Boon is most surprised that estate agents are still not governed by any formal regulatory body. “This has rather evidently created a serious accountability gap,” he suggested. “While mortgage brokers in the UK have to follow the regulations put in place by the FCA to ensure fair and honest consumer mortgage advice, estate agents are seemingly left to operate to the regulations of their conscience. Practices such as conditional selling, restricting access to viewings, or tying mortgage advice to offers should be explicitly banned and subject to meaningful penalties. Ultimately, a regulated system would help restore consumer trust and ensure buyers are free to access impartial financial advice without pressure.”
He summed up: “There is already clear momentum for change, with growing support from both the public and industry voices, including an active petition calling for formal regulation of estate agents and consequences for conditional selling.”
