FirstBuy builders push own brokers on clients
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Concerns are growing that house builders are breaching FirstBuy guidelines by forcing borrowers to choose from a restricted panel of brokers.
Developers claim that FirstBuy borrowers are free to use brokers and solicitors outside their recommended panels, but their terms and conditions, and anecdotal evidence suggest otherwise.
A spokeswoman for Taylor Wimpey says: “We encourage customers to use our recommended IFAs and solicitors who are familiar with the FirstBuy scheme, but they are not under any obligation to use them.”
However, Taylor Wimpey’s terms and conditions for FirstBuy on its website state: “Applicants will need to use a mortgage broker from Taylor Wimpey’s panel.”
Similarly, Barratt Homes’ terms and conditions say: “All Barratt offers are subject to the use of a Barratt nominated independent mortgage adviser and solicitor.”
A spokesman for Barratt says: “Customers are at liberty to choose whoever they wish, but we offer a recommended panel.”
Darren Hall, principal at SDG Hall Financial Services, says that he secured an agreement in principle for one FirstBuy borrower, but she was told by the developer she would have to restart the process using a broker on its panel.
Hall says: “She was given no choice in the matter and decided not to proceed with FirstBuy.”
A spokeswoman for the Homes and Communities and Agency, which administers FirstBuy, says it is normal for developers to have lists of suggested firms.
But she says: “Developers should adhere to our guidelines, which make it clear that borrowers should be free to use any company and should not be pushed towards using a certain firm.”
Ray Boulger, senior technical manager at John Charcol, says that while borrowers may not have to use one of the recommended firms, in reality they have little choice.
He says: “These are first-time buyers who are naïve about the buying process and will not want to rock the boat by going against what they have been told.
“I understand there is pressure on borrowers to use the recommended firms and the problem is that they may get biased advice as brokers who have a relationship with a developer are unlikely to suggest alternatives to FirstBuy.”
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