Mortgage brokers are reporting continued instances of conditional selling with brokerages reporting a "surge in reports of estate agents trying to strong-arm buyers into using in-house brokers", according to research conducted by Financial Reporter.
Conditional selling is when an estate agent tells a prospective buyer that they must use the agent’s in-house broker in order for their offer to be put forward on a property.
Although the practice is illegal, it is widespread, with brokers stating that it is not only "common, it has been positively encouraged". Others stated that "there are some estate agencies where conditional selling is almost standard practice".
Section 9c of the Estate Agents Code of Conduct reads: "By law you cannot make it a condition of passing on offers to the seller that the person wanting to buy the property must use services offered by you or another party. You must not discriminate, or threaten to discriminate, against a prospective buyer of the seller’s property because that person declines to accept that you will (directly or indirectly) provide related services to them."
Previous examples of conditional selling
In August 2023, Financial Reporter covered a potential incidence of conditional selling at a major UK estate agency chain.
A screengrab of the email, shared on Twitter by Chris Schutrups, showed a conversation from a branch manager at Connells to a potential buyer.
The branch manager says: "The offer was originally submitted to the solicitors along with all other offers and your offer was chosen based on the fact that you were using our in house mortgage services and we would be able to chase the sale progressively to a swift conclusion, the solicitors are in favour of this. As the circumstances are now changing we will have to re submit the offer along with all others again and refer back to you as soon as we have a decision."
Separate research found that nearly two thirds (63%) of Access Financial Services mortgage advisers said that their clients have experienced conditional selling in the six months from November 2023 to May 2024. Of that group, 100% of advisers said it caused their client harm such as stress, hassle or confusion. A third (33%) of advisers surveyed said that conditional selling has got worse in the past six months.
