Estate agents have had free reign over the UK housing market for years and the British public are paying millions each year funding them. Now an undercover operation conducted by Channel 4 Dispatches reveals more about how some will act when it comes to selling a home.
The show reveals how leading estate agents including Barnard Marcus (over 37 offices in London) and Felicity J Lord used pressure practices to compel buyers to use their in-house services. The victims submitted to taking on expensive services that could run into thousands each year. Both companies issued appologies and were taking action against the agents they employed. It’s a shame that it takes a secret investigation to reveal such practices. Meanwhile both companies exceed with millions in profits each year, I wonder how much of those millions was down to these tactics?
Top dirty tactics
The show revealed how pressure was being exerted on unsuspecting buyers so that they felt compelled to use the estate agents services including mortgages, surveys and insurance. The incentives included promising prioritised viewings, promises that their offer would be prioritized over others and that if they used their services a property would be taken off the market more quickly. All breached Estate Agents legislation.
Estate Agent helps to commit mortgage fraud
One of the most shocking parts of the investigation showed how several agents would recommend buyers to take out a buy to let mortgage when a residential mortgage looked unsuitable owing to credit status of the individual. A smal white lie about the use of the property was the way agents described how the mortgage would be acquired. The hard truth is that this was blatant mortgage fraud.
Any buyer that watched the programme who was subject to these tactics must in my opinion must be in a position for financial compensation.
One of the old tricks to win a sellers buiness is to over price a property and then win your business. This serves to put your property on the market for longer as buyers will only buy what a home is worth. The time and inconvience to the vendor is then brought to an end when the agent recommends a price reduction. Classic tactic that many vendors still fall for.
Agents in the money
Charging 2% commission of the property sale price, no matter what marketing they undertake means commision payments running into thousands. Some agents are doing so well that offices now look like sleek wine bars or flash media companies!
Law Changes Help Consumers
A stake holder consultation took place with Dept of Trade to which I contributed. The aim was to make the UK housing market more competitive and to encourage innovation. Operating a for sale by owner service in the UK meant for example The House Shop could not add an office phone number to a For Sale board or put buyers and sellers together online!
It’s true that when an alternative to traditional estate agents is talked about the sector tends to respond with varying degrees of anger.One such place to view how competition is a dirty word is at Estate Agents Today a agents forum see here
Thankfully one law that was helping reduce competition was repealed The Property Misdescriptions Act 1991 was now put to bed. See Office of Fair Trading information at
In my view businesses that offer an alternative to high street estate agency are simply offering consumer choice and should be seen as valid competition. In the USA FSBO or For Sale By Owner is seen as a genuine competitor to which agents respond too by offering a better service.
Property Market Undercover
Reporter Antony Barnett secretly films the latest tactics used by estate agents to secure sales and commissions and asks whether some agents are even willing to lie to seal the deal.
Antony Barnett is an award-winning investigative journalist who has been a staff reporter for Dispatches since 2007.
He has made several documentaries including Politicians for Hire, which secretly filmed former ministers like Stephen Byers boasting he was a ‘cab for hire’. His films have investigated the funding of David Cameron, footballers who fail drugs tests and the plight of those who convert from Islam to Christianity.
More recently he has exposed scandals involving Olympic tickets and the board of Her Majesty’s Revenue and Customs. His investigations have also featured on Channel 4 News.
Before joining Channel 4 he was the Investigations Editor for The Observer, where he worked for more than 13 years including spells as Public Affairs Editor and Industrial Correspondent.
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