An investigation by Channel 4’s ‘Dispatches’ programme has uncovered some unsettling practices allegedly used by some of the biggest UK Estate Agent chains.
Agents from Countrywide and the Connells/Sequence group were secretly filmed coercing potential buyers into using their in-house mortgage services, by telling them that their offer would be viewed in a more preferential light by vendors. One even suggested that any subsequent higher offers – even those from cash buyers – would not be put to the vendor, to ensure that their mortgage client was the preferred buyer.
“If this is happening, it’s not just an unfair and unethical practice, but it’s also illegal” commented Taj Kang, Business Development Director at Contractor Mortgages Made Easy. “Agents have a legal obligation to put forward any offers on a property, to the vendor – in writing – whether they’re using the in-house services or not, unless previously notified by the seller in writing that they do not wish to be informed about them.”
“This is especially worrying for those who work as contractors or in other ‘non-conventional’ ways that these advisers simply don’t understand, as it could therefore lead to contractors missing out on their desired properties, if estate agency advisers struggle to obtain the necessary funding for them.”
Advisers at Countrywide were also shown on the programme advising clients to purchase residential property using buy-to-let mortgages, as they could not obtain the necessary funding otherwise.
“Sadly this re-confirms what the industry has known for some time, about the way that some estate agents go about their business” added Steve Clements, Senior Mortgage and Protection Consultant at Contractor Mortgages Made Easy.
“To lie about your intentions on a mortgage application constitutes mortgage fraud, and is therefore a criminal offence. Never mind the fact that if the client cannot obtain the necessary mortgage funding, then there’s a high likelihood that they would be unable to comfortably afford it.”
“This practice of ‘back door’ residential funding via a buy to let mortgage is not just illegal, but also dangerous. If clients stretch themselves financially then the consequences could be disastrous.”
Worryingly, staff at Countrywide were also shown in the Despatches programme telling clients that the early release of the ‘Help to Buy 2’ scheme was exclusive to them.
“It pays to know your rights as a buyer in the current climate” added Taj Kang. “There is absolutely no way that any agent can legally discriminate against a buyer if they’re not using their in-house services.”
Article By: Mark McBurney, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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