The programme raises a fresh debate about conditional selling
Two leading estate agents have defended themselves against accusations of dubious sales tactics, made in a BBC Panorama programme broadcast last night.
Panorama’s undercover investigation claimed to have evidence of bad practice, but Connells said it did not believe the allegations against its staff presented a full or fair representation of its operations. Purplebricks entirely rejected any portrayal of its service as pressure selling.
Even so, the programme has prompted industry calls for changes in the way estate agents operate, particularly around so-called called conditional selling.
Broker Luther Yeates, head of mortgages at Orton Financial, urged: “It is time for estate agents and mortgage advice to be split. A conflict of interest clearly exists and can't be managed effectively.”
Meanwhile, broker Emily Franks, director of Emily’s Mortgage Services, commented: “Brokers have spent years complaining about the practice of conditional selling, and time and time again we hear the big corporates say ‘We will retrain, this is an isolated incident’. It’s the worst kept secret in the property industry. We need all brokers to come together and say enough is enough, we need to be louder and we need to protect the integrity of our advice and industry at a time when client’s need it the most. I have been an estate agent, I have worked for the big corporates, and I can tell you, there are some really good estate agents out there who also do not agree with the practice of conditional selling. This is not a war on estate agents, this is not independent brokers versus in-house brokers, this is doing what is best for our clients, protecting them and giving everybody a level playing field. The FCA champion consumers having choices and being treated fairly and yet this practice goes against all of that. We need estate agents to be regulated in the same way every other party to a property transaction is.”
Panorama investigated Connells, it said, after speaking to more than 20 independent financial advisers (IFAs) and mortgage advisers from across England and Wales who had concerns about how it operated. Its undercover reporter, got a job in one of its offices, in Abingdon, Oxfordshire. During her six weeks there, she claimed to have found evidence that the senior branch manager favoured prospective buyers if they were planning to take Connells in-house services, like conveyancing or mortgages, because it made more money for the company.
The programme alleged that Connells 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 Connells 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 Connells, while the company potentially stood to make £10,000 in total by arranging add-on services and selling the buyer's property too. The vendor said she felt she had been ‘conned’ out of more money.
READ MORE: Base rate speculation: Industry debates Bank of England's next move
Accusations rejected
In a statement Connells Group said: “We do not believe these allegations present a full or fair representation of our operations and we reject any accusation of conditional selling. BBC Panorama offered us a right to reply but refused to provide sufficient evidence of misconduct prior to the programme being aired. If credible evidence comes to light, we will carry out a thorough investigation and take appropriate action.
“With regard to the two case studies highlighted by Panorama, no harm has been caused to the customer in either case. Connells is committed to treating all customers and prospective buyers fairly. We clearly explain how our services work and outline the choices available to clients.”
It added: “We invest significant time and resources in training our teams to ensure they understand the laws, regulations, and guidelines within which they must operate. This includes regular training sessions and a programme of ‘mystery shopper’ quality assurance visits to each branch. Any employee found to be in breach of these standards faces strict disciplinary action, including dismissal. It is standard estate agency practice to identify proceedable buyers – those in the strongest position to complete a transaction, (often referred to as “hot buyers” in the industry) – in the best interest of the seller. However, it is not the case that customers who use our mortgage services are more likely to successfully purchase a property than those who do not.”
The programme also investigated Purplebricks, with a whistleblower secretly filming meetings because of concern about how the business was being operated. It alleged that staff were being 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.
Purplebricks told Panorama that it doesn't overvalue properties and that while price reductions were once a target for rewarding staff, that was no longer the case. It said it doesn't claim to be perfect and apologises wherever it has fallen short. It said it entirely rejected any portrayal of its service as pressure-selling, adding that it does not promote hard-selling and that it focuses on the benefits, not price, when recommending services. In a statement, it also said that since new owners took over in 2023, it had "worked hard to improve service and build a team and culture that puts customers first".
In response to the allegations, broker Serena Smith, from Mortgages with Serena, commented that she finds the home buying journey experience to be extremely poor, specifically for first time buyers, due to their lack of knowledge and understanding. “Although many people wish this had been taught in school, unfortunately, how much attention would’ve been paid to it is questionable. The transparency is lacking and often they are sold a ‘fantastic’ service, however no thought has been given to the fact that the estate agent is working on behalf of the vendor and only seeking to improve their remuneration from said sale. I feel as we have to, so should the estate agents on clearly breaking down and informing every party to what they are being paid.”
