An undercover investigation by the BBC has uncovered what it calls ‘dubious sales tactics’ by estate agents favouring buyers who agree to take out in-house conveyancing services.
The broadcaster investigated UK-wide agency Connells after speaking to more than 20 ‘concerned’ independent financial advisers and mortgage advisers from across England and Wales.
During a six-week undercover investigation – the subject of Panorama: Undercover Estate Agent – the reporter found evidence that prospective buyers were favoured if they planned to take out in-house services from Connells, including conveyancing and mortgages, ‘because it made more money for the company’.
In one incident, the reporter hosted an open-house viewing for a property which attracted 15 potential buyers. Two of the buyers were identified as ‘hot buyers’ – the term used in the branch for buyers who had agreed to take out a conveyancing package or mortgage through Connells.
When the undercover reporter told the office administrator there was a third person interested in the property – a cash buyer – she was told it was ‘just a sale’ and ‘not good enough’.
“They will probably more likely aim to get somebody who’s signed up with us and wants to use our conveyancing, as opposed to someone who is a cash buyer. That’s just how Connells are. That’s why they ride you if you don’t have enough mortgage appointments.”
In a conversation with the senior branch manager secretly filmed by the reporter, the manager explained favouring the ‘hot buyer’ could be worth up to £10,000 more for the company when the added commission, conveyancing fees and selling the buyer’s old house were all taken into account.
Connells told that BBC that it rejected ‘any accusation of conditional selling’ and that ‘no harm has been caused’ to the customer in question. The company added:
“It is not the case that customers who use our mortgage services are more likely to successfully purchase a property than those who do not…”
The company said it invests ’significant time and resources in training our teams to ensure they understand the laws, regulations and guidelines within which they must operate’.
“Any employee found to be in breach of these standards faces strict disciplinary action, including dismissal.”
In a second investigation, a whistleblower working with the online estate agent Purplebricks explained how she was told to encourage customers to hire conveyancing services through companies the estage agent worked with.
During one online meeting recorded for Panorama by the whistleblower, the team leader told her:
“We don’t want them to get a quote for comparison because we are by far and away very expensive.”
In a further meeting, the whistleblower recorded her team leader encouraging staff to make ‘a heinous amount of money’:
“So let’s try and really squeeze every lead for as much as it’s got – and I want us to be a bit more relentless. The urgency is massive… there is still a heinous amount of money to be made.”
First-time buyers Ryan Evand and Olivia Phelps, who purchased a house and conveyancing services through Purplebricks, told Panorama they paid £2,820 for conveyancing. After using a price comparison website, Panorama found they could have received the same service for up to three times less.
The couple told the programme:
“We were none the wiser having never done all this before. I certainly felt like maybe they had taken advantage of us a bit because we were first-time buyers.”
Purplebricks told Panorama that it entirely rejects any portrayal of its service as pressure-selling, does not promote hard-selling and focuses on benefits, not price, when recommending services. The company said it has been under new ownership since 2023 and has worked hard to create a culture and team that puts customers first.
Panorama: Undercover Estate Agent is available on BBC iPlayer.
Connells and Purplebricks have been contacted for comment.
7 responses
Panorama is well respected in the media.
The BBC investigation provided shocking details of what a contaminated property market looks like. It showed all too clearly what happens when members of the public come into contact with some estate agents. But should we be surprised?
Several statements about ‘conditional selling’ stood out for me from the programme:
* ‘Ignore cash buyers- get a buyer signed up for ‘conveyancing and mortgage services’
* ‘Sell Sell Sell!’ (that’s ‘Add on services’)
* ‘Hot Buyers’
* Confidential information being shared
* ‘Fast and loose with the rules’ And my favourite
*’Double Bubble’
One respected commentator spoke of a ‘perversion of the market place’
Estate agents whole culture is based on the concept of a sale of a product not the best interests of vulnerable sellers or buyers.
This is why the idea put forward by the Home Buying and Selling Council and others of estate agents acting like quasi-property lawyers to supply ‘material information’ is faintly absurd and inimical to the integrity of the UK’s huge property market.
Thanks must go to Panorama for shining a spotlight on the murky world of ‘conditional selling’.
Integrity dies in darkness.
Allowing estate agents to be financially linked is the root of the problem.
Connells and Purple Bricks must divest financial links to mortgage and conveyancing services.
1. On the programme, LOTS of people were interested in these houses for sale. Why is it not standard practice to invite ALL the interested parties to offer for the property at a ‘Closing Date’ [like normally happens in Scotland] ?
[also called a ‘best and final offers’]
2. The Estate Agents are legally liable to account to their clients for the [very probably] undisclosed commission they receive. This is sounding like the car finance scandal.
3. well done, Panorama.
Estate agents need to remember who employs them and who they work for and who pays the fee. The seller. If they are having trouble remembering that, then this concept needs enforcing.
Buyers and sellers should also be better at making sure that they choose the right agent for them, do their due diligence and know their rights. Buyers are incredibly naïve when spending their money and do not do all the homework they should do. Even down to surveys; I have heard tails of agents on the phone recommending to a buyer that a survey is not required and a buyer takes that advice.
To all: Make sure ALL matters are firmed up in writing. Do not just take someone’s word for it on a call, follow it up on an email. If you are buying and want to make an offer, make it in writing! Create a paper trail, create accountability.
It’s an epidemic across nearly all EA. I’ve had personal experience of buying and selling with problems. I accepted a lowish offer on my house because the EA said they had sold the buyer’s house. They encouraged me to use their conveyancing firm for a fixed fee. Problems almost immediately. Delay after delay etc. Buyer went quiet. On the Friday afternoon I was told I’d be exchanging/completing the following week. On Monday, I received a call to say the buyers had pulled out. No reason given. Removal firm booked as they had limited slots, so I lost my money and no sale. This was Hunters EA.
Recently, I wanted to view a property and I was a cash buyer. The apartments weren’t selling, so I thought the EA would be very keen to let me view. No reason given, but was told they weren’t doing viewings. Prob because I’m a cash buyer and wouldn’t need to use their mortgage services. Pygott Crone EA.
The Law Society need to look at this as well together with the CLC and analyse the relationships between agent and Conveyancer. I’ve genuinely seen cases where a client is give a quote by the recommended Conveyancer and at the end of the process, the bill is 50-100% more than the quote. I’ve seen a quote from a factory firm who had 4 pages of additional fees. How is a client meant to recognise which one will apply? Considering some of these Conveyancers/Solicitors are paying these agents £550 + VAT per matter, it is clear that a firm cannot stomach those costs out of the profit and loss account. It is also clear that a basic quote won’t be able to sustain those levels of referral fees. We were meant to be introducing price transparency but it is clear that firms are properly taking the mick with that by seemingly underquoting at the start and building it up knowing that the only choice the client has is to pay it or pull out. The founding principles are looking after the clients best interests, how is it in the clients best interests in increasing the bill by 50-100%? We might have regulation our end but to me it is clear it is not being enforced whatsoever.
I hear tales that some agents are taking the payments on account from clients and then using that payment as a referral fee by dealing with the searches. No doubt they then have their own agreements with search providers.
A decent set of searches (Local, Official Drainage, Environmental) tends to cost £250-350 based on which part of the country you are in. But I am seeing firms charging clients £550 + VAT for searches. Who is pocketing that difference? I see firms charging £50 + VAT for pre-completion searches, who is pocketing that difference?
Yes there are some agents behaviour who is clearly questionable but our industry needs to have a long look at ourselves. All of this can be traced back to agents referral agreements. The amount agents are demanding from Conveyancers is going up not down and is squeezing our already very tight profit margins. With firms out there willing to pay it just to keep the cash flow coming in, it is very much blighting our industry further.
Panorama barely scratched the surface with Connells. There wouldn’t have been time in an episode I suppose, but Connells own:
– A surveying company that is doing a huge volume of the property valuations for mortgage lenders. Plus additional surveying for buyers if Connells can convince them to get a survey.
– An EPC company that does 10% of all EPCs in England and Wales and undoubtedly all of the properties Connells have instructions to sell will be buying EPCs through that company.
– It’s own conveyancing companies. Conveyancing Direct and Total Conveyancing Services.
– Connells probably make their conveyancers always use a specific search provider at an inflated cost and get a cut of the search fee for setting it up that way. Probably TM Group given that Connells owned shares in it until 2021.
– Probably make their conveyancers use a specific title insurance company at an inflated cost and get a cut of the insurance premium for setting it up that way. Probably Countrywide Legal Indemnities given that Connells bought Countrywide Estate Agents and the clear branding link between the two.
– Own LMS, which is borderline compulsory for all firms to use at this point due to lender panel requirements. LMS gets paid for every completed case hosted on its systems.
– Are ultimately owned by Skipton Building Society.