Homebuyers feel pressured into paying their estate agent for extra services, such as mortgage advice and property surveys, fearing they may miss out of their dream home if they choose to shop around.
A survey conducted by the Homeowners Alliance found that 25% of people said they felt under pressure to use an estate agent’s own services, even though these can often represent poor value for money.
This includes using in-house mortgage brokers, conveyancers and other services provided by estate agents.
The campaign group says house buyers who don’t shop around are likely to have increased costs.
Of those buyers who felt pressured by their estate agent, 55% said they were directed to the company’s mortgage advice team, 49% felt pressured to use them for conveyancing and 41% felt the need to conduct a survey using their agent’s in-house staff.
Other services, such as energy performance certificates and insurance, were also sold to consumers under pressure.
The Homeowners Alliance says it has seen cases where customers missed out on properties despite offering more cash because they did not want to use the agency’s in-house mortgage broker and surveyor.
Another would-be buyer was told they could only view a property after they had booked a mortgage advice appointment – costing £500. This was despite the fact they already had a mortgage offer in place.
‘Buyers should be encouraged to shop around’
Paula Higgins, chief executive at Homeowners Alliance, says while agents are legally required to set out what referral fees they receive, this is rarely done in practice.
“It’s not good if buyers and sellers feel under pressure to use an estate agent’s services because they are led to believe doing so will put them in a better position for securing their dream home or get them a preferential treatment by the estate agent. They should be encouraged to shop around to find the best deal,” she says.
“The great majority of estate agents are upstanding and a vital part of the home buying and selling process, but sadly a small number may be encouraging their clients to use their services for all the wrong reasons, not to help smooth the process but for financial gain.
“While there is nothing wrong with agents offering services to their clients and receiving a fee for this where it is done in a transparent way, it’s important to note that their client is the seller not the buyer. Offering services to both can lead to a damaging conflict of interest and harm competition.”
The organisation wants the government to enforce rules on declaring referral fees and ban agents from selling products to both parties in a property transaction.