Emily Franks, director of Emily’s Mortgage Services, who previously worked at a large estate agency group, said she was “not going to war with estate agents” but “going to war with the culture”, as she knew what it could be like and wanted to champion the good agents.
She said the best way to do this was to regulate estate agents and is running a petition with FT Adviser to ban conditional selling.
Emily said it was “really common” and the day after the documentary aired, a client told her an estate agent asked for a copy of her mortgage offer. Emily asked the estate agent why they needed it, and they said it was for their anti-money laundering (AML) policy, which she said she already covered on her end.
She said she understood why conveyancers, who are regulated by the Solicitors Regulation Authority, had to do this, but there was no similar requirement for estate agents.
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As recently as June, Emily lost a client to an estate agent who had a policy that they needed to use their in-house adviser. She tried to tell the client this was against the law, but got no response.
“It’s not about the profit, it’s not about money. I will bring other clients in based on my reputation. You know, I’m very lucky. But it’s that the client has been told they have a policy. There is no policy,” she added.
Emily reported this to the Financial Conduct Authority (FCA) this Tuesday, who said it needed as much evidence as possible, and it would look into it.
However, she said it was a “catch 22” because the FCA did not regulate estate agents, Trading Standards might not pick it up, and only consumers could complain to The Property Ombudsman.
On the other hand, Emily had a client last year who refused to use the estate agent’s in-house broker, so were told their offer would not be put through. Two weeks later, the estate agent came back to the client to offer the property again, but the client refused, so they could stick with Emily.
“For the client to give up a house for me, or to be able to use me, it should not have happened like that,” she said.
Clear policing of estate agency practices
Emily said: “There needs to be a really clear policing of how referrals are made. Now, I don’t think that estate agents should have direct access to the broker if they’re working for the same company.
“If you’ve got a referral, you [should] put it onto a system, it goes to head office, and it gets allocated out to the broker team, who then deal with it. And there’s some way of updating the pipeline to then update the agent to say the mortgage offer has been issued. Then it’s up to the client to be able to relay any information to the estate agent without the broker feeling the pressure, because the estate agent is on the phone every two minutes wanting to know what’s going on.
“That would keep in-house brokers protected, and it would keep our clients protected, and it would allow estate agents to still offer that service without looking at a policy that doesn’t exist,” she said.
She said there needed to be ways to stop in-house brokers from feeling pressured by estate agents through policy or a regulatory body ensuring a “robust code of practice”.
‘It is not okay’ for estate agents to withhold offers
In the documentary, one buyer’s offer would not be put through to a seller unless they used the in-house broker.
Samantha Lindsay, mortgage and protection adviser at My Mortgage Angel, said: “The Panorama documentary sheds much-needed light around this highly unethical and illegal practice of ‘conditional selling’. It’s not okay that estate agents are withholding offers from sellers in favour of those using in-house services.
“Pressurising aspiring homeowners to use an in-house mortgage adviser is not okay. For anyone taking out a mortgage, it’s imperative that they look at all the options. Do speak to the in-house estate agent broker if you want to, but also seek advice from an independent broker who can take you through your options before you make a decision.”
Lindsay added: “A client I have been working for many years was recently told by an agent that they had to use their in-house broker when purchasing a new property. It’s upsetting for our long-standing clients, as they feel they have to pick between working with us, a broker who they have built a relationship of trust with over the years, or losing their dream home.
“More information and education around this for aspiring homeowners is key so they understand their options right from the start.”
Purplebricks and Connells reject claims
Addressing the claims made in the documentary, Purplebricks and Connells Group both denied any pressure sales tactics.
Purplebricks said it was “extremely disappointed and concerned” by the way it was investigated, and its evidence challenging the claims was ignored.
“The views expressed do not reflect how we operate or what we stand for. It’s not the standard we hold ourselves to, and it’s not how our teams behave today after having made big changes to improve our culture. We can confirm that the individual highlighted no longer works for Purplebricks,” the statement said.
A spokesperson for Connells 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.”
They added: “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.”
