Buyers Being Forced Into Mortgage Loans By Estate Agents
January 9, 2010
A recent study that was carried out by Times Money has suggested that in many cases potential property buyers in the UK are being forced into taking costly mortgage loans through the estate agency that they go with.
The report accused estate agents of using unfair practices to boost their own profits, adding that in some cases buyers are forced to use estate agency services even if they do not have any need for them.
According to the report services such as in-house mortgage services are often pushed onto potential buyers, and in some cases this happens even if the buyer does not need the service.
Estate agents are able to make commission by selling mortgages through their in-house advisors, and the worry for the buyer is that they have a limited panel of lenders that they work with which means that they may not necessarily be getting the best rate for the borrower.
The report also claims that the Office of Fair Trading has evidence of such practices, and research that was carried out on behalf of the Office of Fair Trading by Gfk NOP suggested that one in every twenty property purchasers had been forced to take a mortgage through their estate agent in order to purchase their home.
These practices have been further highlighted through the increased level of complaints that have been received since the start of the year by the Property Ombudsman. The UK advice service, Consumer Direct, has also reported an increase in complaints in the past ten months, stating that it has received around 3500 claims relating to misleading information and poor service. A number of independent brokers are also convinced that estate agents are using unfair practices according to the report.
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