FCA: 25% of brokered mortgages follow estate agent suggestions

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Almost a quarter of residential mortgages are taken out with advisers recommended by estate agents, according to the Financial Conduct Authority.

Of those, a quarter also felt pressured to do so, the FCA adds.

The FCA made the statements as part of its interim report into mortgage competition, published today.

The regulator says: “Of those who have taken out a residential mortgage (or switched product) in the last three years and arranged this through a mortgage intermediary, around a quarter (23 per cent) said they chose the intermediary because they were recommended to them by an estate agent.

“Our Financial Lives Survey 2017 also indicates that, of those who used an intermediary recommended by an estate agent, around one in four felt they had to do so.

“While sample sizes here are small, the findings fits with earlier research by ESRO where consumers report estate agents encouraging them to receive in-house advice to improve their chances of getting viewings and making offers on properties.”

However, the regulator also says this situation is not harmful for consumers, as they do not pay more when going through estate agents’ preferred intermediaries.

The FCA says it has found “little evidence that current commercial arrangements between firms are associated with material harm for consumers”.

It adds that “customers taking out mortgages through an intermediary that has commercial agreements with an estate agent or developer do not, on average, pay more for a mortgage than customers of intermediaries without such links”.

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