Mortgages  

Advisers back campaign for tighter controls of estate agents

Lawrence Robbins, director of London-based amortgagenow.co.uk, said estate agents had been asking for more personal financial information from potential homebuyers than they needed, while others were forcing potential buyers to use the agent’s own tied, in-house adviser.

He said this could lead to a breach of data protection law as estate agents were likely to obtain personal financial information more easily if an in-house broker was processing the mortgage application.

Mr Robbins said: “If there is a scenario where the employee selling the property and processing the offers sits near the employee who has all your client’s details to find the best mortgage deal, how can estate agents reassure us that no information is being passed on?”

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Brian Brotherton, principal of Essex-based The Partnership, said that despite the terms of the Estate Agents Act 1979, by which agents must pass on all offers to vendors, regardless of whether buyers want to use the firm’s other services, agents could be breaching data protection law.

Other advisers who have voiced their concerns include John Bloomfield, IFA at Tyne and Wear-based Bloomfield Financial; Olabode Ayanwuyi, director of Surrey-based Blackstar Finance; and Bill Crowley, partner at Swindon-based Castlegate Investments.

Last week, Donna Hopton, founder of the Cherry network of advisers, raised the alarm after advisers contacted her to complain that some estate agents might be passing on sensitive financial information to vendors, giving them an unfair negotiating advantage over buyers, or might be refusing to pass on offers unless clients saw the in-house broker.

Reaction round-up

A spokesman for the Office of Fair Trading said agents had a legal duty to pass on all offers, unless the vendor had requested otherwise. He added that agents also had a duty to represent the financial status of buyers accurately, although that did not permit actions that would place agents in breach of the Data Protection Act.

Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, said the estate agent had a “duty of care” towards the vendor to ensure the buyer could complete transactions. He said “reasonable enquiries” over funding for offers were allowed, but added: “What is not allowed is to refuse to pass on an offer that has been made in good faith, or to apply conditions to passing on an offer to the vendor, such as using their broker or seeing proof of means.”