An update for 2025: Is conditional selling getting better or worse?
Based on these figures, Financial Reporter wanted to find out if conditional selling had continued to worsen over the past year.
We asked brokers whether they had experienced conditional selling in the past 12 months, whether they think the practice is increasing or decreasing, and the impact it has on them and their clients.
Here are some of the responses:
Richard Dana, founder and CEO of Tembo Money: "We see conditional selling particularly from developers and estate agent linked mortgage brokers. There are some of the larger firms that are certainly repeat offenders. It doesn’t seem to have changed much over the past few years in terms of volumes of cases but it is definitely still happening. The main issue is that it potentially impacts the impartiality and independence of the advice being provided to the customer.
"If an estate agent will lose a sale their in-house mortgage broker may be more inclined to push it through, even if that is not the best advice for the customer. Most of the customers we deal with are savvy enough to have worked out that they are better off with someone completely independent from the sales process, but many would not be, particularly those who are new to the process, which can sometimes feel overwhelming."
Samantha Lindsay, mortgage and protection adviser at My Mortgage Angel: "A client I have been working for many years was recently told by an agent that they had to use their in-house broker when purchasing a new property. It’s upsetting for our clients as they feel they have to pick between working with us or loosing their dream home. More information and education around this for aspiring homeowners is key so they understand their options right from the start."
David Hollingworth, associate director of communications at L&C Mortgages: "Whether agents do insist on customers taking the mortgage through their adviser is always hard to understand. But what does tend to come across is that some agents will give the buyer the distinct impression that the success of an offer could be more likely where mortgage advice is taken through them or their preferred channel.
"Whether it would reach the point of being conditional is hard to be sure but if the customer feels that their chance of buying the home of their dreams will be hindered by going elsewhere they may not want to take the chance, even where it could end up being more expensive.
"When activity levels are lower it’s only likely to see an increase so the prevalence may fluctuate over time. It also won’t be something that applies across the market either and some are bound to be more prone to this than the majority. That’s what can make it so frustrating for mortgage advisers as it’s something that has been ongoing for some time despite the code of practice being quite clear. Industry bodies should therefore try to work together to continue to promote best practice and weed out those that don’t stick to the spirit of the rules."
We also reached out to Access FS to see how their experiences had changed since their initial research a year ago.
Nick Jones, mortgage sales and marketing director at Access FS, said: “We are seeing in surge in reports of estate agents trying to strong-arm buyers into using in-house brokers. Agents are prioritising in-house advisers to secure a referral fee. While that works out well for the agent, it may not be the best option for the client.
“Obviously, agents should not be pressuring potential buyers into using their inhouse mortgage broker or financial adviser. Typically, agents are caught out telling potential buyers the process will be faster if they use the in-house, or that the buyer could lose the sale if they don’t. In some instances, they may not even forward an offer to the client. It’s outrageous. Even more worrying is evidence that these sorts of shady practices are institutionalised. It’s a systemic stitch-up."
Discussing the impact on their clients, Nick Jones commented: "While it’s legal for agents to endorse the use of their in-house mortgage adviser, they cannot insist a client uses them. Or, in worst cases, resort to a blackmail – with comments like, ‘we cannot put your offer forward until you have spoken to our adviser’. Not only does this breach Consumer Duty rules, it also violates The Property Ombudsman’s Code of Practice, which bans residential estate agents enforcing a conditional sale by mandating their own services. Furthermore, the Estate Agents Act 1979 states every offer must be put forward to the vendor regardless of whether the buyer has obtained their mortgage from the mortgage adviser recommended by the estate agent. Unfortunately, none of these rules appear to be having any effect on eradicating conditional selling, leaving many consumers in distress and brokers feeling helpless.”
Is regulatory change the answer?
The FCA noted that conditional selling is back on its radar as part of its two-year strategy for mortgage intermediaries, published in January 2025. The FCA said it will "continue to act where we receive intelligence and reports of homebuyers being pressured to use estate agents’ in-house mortgage brokers".
It added: "We encourage any firms to which this applies, to review whether they are adequately identifying and taking appropriate steps to mitigate conflicts of interest."
However, brokers we spoke to said that the government and regulators must do more to crack down on conditional selling.
Nick Jones said: “The Government and the FCA need to enforce compliance with existing regulations. Until then, brokers will have to help themselves: where regulatory enforcement has failed, we continue to support brokers with advice and a free letter template which is available on our website. For brokers whose clients find themselves early victims of conditional selling, brokers can write to the estate agent, highlighting where the Code demonstrates that conditional selling is against the law. They can also send the agents their client’s Decision in Principle (DIP) certificate and proof of deposit funds. If the agent either doesn’t respond or continues to pressurise the client, the broker should escalate the issue to the property ombudsman.”
