Given that housing market conditions have slowed, with fewer property transactions taking place, more estate agents are likely to become more reliant on financial services, and seek to earn more in broker and solicitor fees, procuration fees from lenders and potential commissions for home insurance and life insurance, by insisting that buyers use their in-house advice service, it has been claimed.
The Times reports that independent mortgage brokers are once again concerned about skyrocketing conditional selling practices at certain corporate estate agencies, most notably Connells.
The negotiators at these agencies are accused of essentially intimating to prospective buyers that their offers to purchase a property will not be put forward for consideration to the seller unless they agree to additional in-house services offered, such as mortgage advice or legal services.
It is alleged that some agents at Connells, which has 1,250 branches including affiliates under its umbrella, are adopting conditional sales tactics, despite the fact that they are against the rules in the Property Ombudsman’s Code of Practice.
The Estate Agents Act 1979 states that every offer must be put forward to a seller regardless of which mortgage broker the buyer uses. Yet the practice is rife, according to several independent mortgage brokers that spoke to The Times.
Lewis Shaw, owner of Riverside Mortgages in Teesside, believes that estate agents could become more reliant on financial services, amid a slow housing market, but says that it is difficult to prove instances of conditional selling because the methods are subtle.
He explained: “They [estate agents] won’t put it in writing, but they’ll say we can’t put forward your offer unless you come into the office and meet with our in-house financial adviser. But you should not have to come in if you have a mortgage in principle in place already, and you’ve got a bank statement showing proof of deposit, a solicitor [lined up] and proof of ID.”
Imran Hussain, director of Harmony Financial Services in Nottingham, believes that his clients have been pressured to use the in-house mortgage services of Connells or Countrywide five times in the past year.
“I’ve always experienced it with first-time buyer clients. They’ll try to force you to see their in-house adviser under the guise of financially qualifying you,” he said.
Jamie Lennox, director of Dimora Mortgages in Norwich, has had similar experiences with the Connells group. “We’ve had it happen to us ten-plus times over the past year and have lost clients because of it.”
Rhys Schofield, a broker with Peak Mortgages and Protection in Derbyshire, adds: “Connells is the name that comes up in broker forums… But some of the new-build companies are just as bad. My frustration with conditional selling is nothing ever happens unless the customer complains. But they don’t want to go on the record because they don’t want to lose out on the property.”
The Times spoke to another mortgage broker in the northwest, who asked not to be named to protect her client’s transaction. She lost the client to an agent at Entwistle Green, a Connells-owned agent in the region. She was told by the agent that the likelihood of buyers having their offer accepted was “a lot higher” if they used the in-house mortgage broker, and that if they didn’t “it could jeopardise [an] offer”.
In August 2022 FTAdviser reported that Peter Speak, a legal consultant for Connells, said that some staff were “perhaps overexuberant” and “push too hard” on in-house financial services, but insisted that mandatory appointments with in-house brokers were to perform anti-money laundering checks and could be misinterpreted by buyers as pressure to use their broker.
Scott Taylor-Barr, financial adviser for Carl Summers Financial Services in Shropshire, is not surprised to hear allegations against Connells, but thinks it is down to their sheer size, not necessarily company culture. “They’re the biggest. So if it happens in, say, one in ten branches, and you’ve got one organisation with a thousand branches, it’s happening a lot more often.”
Connells told the press: “We do not comment on findings of internal investigations. Connells Group’s in-house mortgage services are entirely optional, have no bearing whatsoever on a buyer’s ability to secure a property through one of our branches. We take allegations of pressurised selling very seriously as it is Connells Group policy to treat all buyers equally, regardless of whether they opt to use additional services. Clear directives are issued to staff that we do not tolerate pressurised selling of in-house services.”
“I’ve always experienced it with first-time buyer clients. They’ll try to force you to see their in-house adviser under the guise of financially qualifying you,” he said.
Provided the agent is not saying “you must do your mortgage through us or you can’t view/buy” then I really don’t see what is wrong with this. Sounds to me like another article promoted by mortgage advisors hurling allegations around because they are often lower down the contact chain. Here’s an idea, buy an estate agent!
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If they are forcing them into appointments, and i’m sure they are having come from a corporate background, its wrong.
This will be coming from higher management however, so the negotiators are only doing what they are told!
If they aren’t using their financial services they will do their best to pick a buyer that is, where possible.
Doing the best for them, not their clients.
That being said, 30% of sales agreed dont exchange, and people lie and say they have a mortgage when they dont, so there is nothing wrong with telling them they must be financially checked by your broker to confirm their funds and position. I make sure my vendors are in agreement with me prior to marketing that i will financially qualify an offers, they are always agreeable.
If your broker can get them a better deal that’s good for them! As always, there is a fine line.
Estate Agents are salesmen at the end of the day!
Why don’t we worry about whats important and get the whole method of buying an selling in this country down to weeks, not 4-6 months, its criminal!
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That being said, 30% of sales agreed dont exchange, and people lie and say they have a mortgage when they dont, so there is nothing wrong with telling them they must be financially checked by your broker to confirm their funds and position. I make sure my vendors are in agreement with me prior to marketing that i will financially qualify an offers, they are always agreeable.
You see that is where your argument falls apart, you also believe there is nothing wrong with financially qualifying buyers but you just want to be the one that does it!!
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Oh dear oh dear oh dear………..they do say any PR is good PR but not so sure about this one-especially as all the brands are wholly owned subsidiary’s of …..Skipton Building Society.
One must qualify buyers as not to do is outside of the Estate Agents Act we all get that .
Peter Speak, a legal consultant for Connells, said that some staff were “perhaps overexuberant” LMAO
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You do love Connells bashing Tim, maybe after 6 years – it’s time to move on
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Tim ? (I wish)
Anyway-nothing to do with bashing anyone Chilli. All about fairness and wanting to ensure competition is operating both fair and legal .Our industry (which I care passionately about) has been through the wringer of late with agents IMO just “sailing too close the wind”-this ultimately dumbing down our industry including the racing to the bottom on fees making it a lot harder for good,honest agents .
Rather than criticising a post from a meagre PIE reader maybe you should focus on defending the C Group against the article …………….unless its indefensible of course.
The article in the Times does nothing to help us,any of us, what so ever.
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Tim,
As someone who has personally worked for both Connells and Spicerhaart I feel I have a fair stance to provide a balanced view… in all the time for working under one of the Connells brands there has never been a culture to conditionally sell, whereas in contrast Spicerhaart, a company headed up by ex-brokers has a deep routed culture to ‘substantiate’ offers in advance which if done in line with the TPO Code of Practice is fine, although its often not the case due to the hard sell and preferential treatment of those using Just Mortgages.
It may be before your time but you seem to have forgot the time Spicerhaart were caught doing exactly what the article implies on Dispatches. As a distant viewer of these comments over a long period of time I do agree with other comments that you do need to move on from Connell’s bashing at any opportunity. No company is perfect and I expect there is a culture in few corporate branches to conditionally sell but this is not unique to any specific business and considering Spicerhaart wouldn’t even allow buyers to view during Covid unless they were pre-qualified by a Just Mortgages broker, I would stick your head back below the parapet.
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it’s like the worst kept secret, everyone knows they do it and from time to time someone makes a stink about it, blah blah,blah
The Skipton Building Society estate agents otherwise known as Connells/Sequence will continue do it until they get a massive fine or when one of the top dogs, gets prosecuted
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mr Wardly you know that we at Haart have been pushed to sell mortgages to our buyers since I joined. weekly meeting after meeting about mtv and actively told by tt that we need to be creative in making sure our buyers use just mortgages and that if we don’t we are in trouble. It’s a joke that you are on here when we are being told to conditionally sell
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Naughty Connells Person !
Never heard of a mr Wardly tbh
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London Agent -If I was indeed who I think you think I was – do you not think I would have enough information to accurately comment on this whole affair far better than you I imagine ?
The only one who should keep their heads down are those mentioned in the article inThe Times
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Oh come on Timothy. We all know who you are, you’re about as inconspicuous as a tiger at a tea party! If you could jump off PIE and use your time to manage Russell to getting us some more new builds to sell, that would be great!
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Nothing illegal about it. An agent is required by code of conduct to qualify a buyer before submitting an offer to the vendor. Sorts out the time wasters etc.
However when it does become illegal is when they refuse to submit an offer unless they use their financial services or misrepresent the buyer to the vendor in favour of one that will use their financial services.
If the potential buyer declines to use their services, they must not hinder the offer getting to the vendor. They submit the offer with the information they have and it is for the vendor to decide who to go with. The agent must also declare arrangements they are making that earns them commission from buyers arrangements, to the vendor and any sensible agent would have this fact stipulated in their terms of business. If not, you may find the commission is payable to the vendor!
You will never stop what goes on behind closed doors, but if found out, the penalties are excessive.
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