Homebuyers feel pressured to use mortgage brokers recommended by estate agents

11 December 2020 | General

Almost half (44%) of homeowners who have used a mortgage broker used one recommended to them by or linked to an estate agent, research from independent mortgage broker Boon Brokers found.

Meanwhile over a third of those (37%) said they felt pressured by the estate agent to do so.

Gerard Boon, founder and partner at Boon Brokers, said: “We regularly hear from homeowners who say they have felt pressured to use an estate agent’s mortgage broker and some have even been told it would help them get a better deal on the house they wanted, or that it would put them at the top of the list of potential buyers.

“Obviously, these practices are totally unacceptable and we would hope that most estate agents would be as horrified as us to hear these stories.”

One in 12 mortgage holders (8%) believe that using an estate agent’s recommended broker will give you a better chance of securing the property you want – and a small number (4%) said the estate agent openly implied that they would get preferential treatment if they were to do so.

However that figure rose to one in 10 in the 18 to 25 age category, suggesting first time buyers in particular may be being targeted.

Some 74% of 18-25s who had used a mortgage broker admitted it was one linked to the estate agent.

Many estate agents have their own in-house mortgage brokers or have links to a third party, and often receive commission on any mortgages arranged, whilst a fee is charged for the advice given. Although it is legal for an estate agent to let customers know a service is available, they are not allowed to give any preferential treatment to those choosing to act on the recommendation.

Another potential issue highlighted by the research was the requirement for people to share their personal and financial information with multiple mortgage brokers.

The study revealed that on average people dealt with three different estate agents when buying their last property, meaning if they needed to liaise with mortgage brokers for each agent, they would be sharing their personal information multiple times.

One in four people (24%) admitted they were nervous about sharing their personal and financial information so widely.

This post has originally been featured in Property Wire.