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Estate Agents Using Unfair Tactics To Boost Profits

Thu, 03 Dec 2009
A large number of UK estate agents are using unfair practices to increase profits, it has been revealed.

An investigation by Times Money found that many estate agents in Britain often pressure home buyers into using additional services, such as in-house mortgage loans, that earn agency staff commission, but leave customers thousands of pounds worse off.

The newspaper discovered that in one case a buyer was told by an agent from Barnard Marcus, part of the Connells estate agency group, that she would only be able to secure a deal on a three-bedroom house in South London if she arranged her home loan through the agency’s mortgage service .

According to the Office of Fair Trading, this type of illegal practice is not unusual with research showing that one in 20 UK home buyers who have taken a mortgage from an estate agent were told they had to do so in order to have their property offer accepted.

Aaron Strutt, of independent mortgage broker Trinity Financial Group, said: "In-house mortgage advisers may not be independent or whole-of-market so they only have a limited number of deals, potentially leaving buyers worse off."

"Buyers should not be fooled into thinking they have to take a deal when putting in an offer for a new home . However, it appears that as house sales pick up, more buyers are falling into the trap."

Richard Morea, of London &Country Mortgages, added: "It is commonplace for clients to complain to us of being bullied into taking mortgages from an estate agent’s in-house broker. It is not limited to one estate agency chain - this is an industry-wide problem."

According to Times Money, Consumer Direct received more than 3,500 complaints about estate agents in the year to October - up 10 per cent on the same 10-month period last year - with over a third concerning substandard services.

The Property Ombudsman has also seen a rise in the number of consumer complaints in recent weeks.
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