Do You Have to Use Your Estate Agent’s Mortgage Broker?

Once you’ve found your dream home and have an offer accepted, the next part of the process often feels like it moves very quickly. It’s exciting to be starting on your home ownership journey, and you’re likely to be eager to get your mortgage in place.

However, while it might feel convenient to use your estate agent’s in-house mortgage broker, it’s important to remember that isn’t your only option. We look at the pros and cons of blindly using mortgage brokers and other services recommended by your estate agents.

Do you have to use your estate agent’s mortgage adviser?

No you don’t. While many buyers feel pressured into using these services, and may even wonder if their offer depends on it, you are under absolutely no legal obligation to use any of the services your estate agent recommends.

In fact, legally, an estate agent cannot force you to use their mortgage broker, solicitor, or any other associated service as a condition of your offer being accepted. Under the Estate Agents Act 1979, it is illegal for an agent to discriminate against a buyer who chooses not to use their services.

They are also legally required to pass every offer you make to the seller, regardless of whether you’ve seen their mortgage adviser or not. If an agent suggests that using their broker will give you any sort of advantage, they are likely breaching industry codes of conduct.

If you experience this type of pressure, It’s important to report this type of behaviour to whichever ombudsman scheme they are a part of - This would be The Property Ombudsman (TPO) or the Property Redress Scheme (PRS). You should also report them to trading standards.

The benefits of using an independent broker

There are a number of benefits independent brokers offer that your estate agent’s in-house broker won’t necessarily be able to offer you:

1. No guarantee of whole-of-market access

One of the biggest pitfalls of in-house brokers is their limited scope. Most estate agent brokers are tied to either a specific lender, or a limited panel of lenders. This means they can only advise you of and offer products from them.

On the other hand, a whole of market broker has access to hundreds of lenders and thousands of deals across the entire mortgage market. This means they have a far greater chance of matching you with a lender suited to your specific needs.

2. A limited range of products

Tied brokers tend to have access to a small percentage of the market, which dramatically reduces the type of deal available to you. For example, they may only offer certain lengths of fixed-term deal, or be unable to offer flexible lending criteria, such as lending to older applicants, lending on non-standard construction properties, or bad credit lending.

An independent mortgage broker with access to the whole market, however, can search thousands of products, including those offered by smaller building societies and specialist lenders. This provides far greater opportunities to those borrowers with niche circumstances, and opens up the market to include greater interest rate competition. Even a small difference in an interest rate can save you thousands of pounds over the life of a fixed-term deal.

3. Acting in your best interest

An independent broker is obligated to act solely in your best interest. In contrast, an estate agent’s broker is likely to be acting in the best interest of the estate agent. While they can offer you the best of their limited range, they are unlikely to advise you of deals outside of their panel, which could be much better for you.

Estate agents, by nature, want the sale to go through as quickly as possible, and at the highest price, as this leads to a greater commission. If your broker is sitting in the same office as the person negotiating the sale, there is a clear conflict of interest.

Using an independent broker ensures your financial data remains private and that the advice you receive isn't influenced by the agent's desire to hit a sales target.

Why people choose in-house brokers

Despite in-house brokers having a limited range of mortgage products to recommend, home buyers are frequently swayed by the convenience of using the same people to take care of everything for them. This avoids additional effort, and for busy people, has an understandable draw.

However, in reality, using in-house services is unlikely to speed up the home buying process. While it might save you a ten-minute phone call to set up an initial appointment elsewhere, it rarely speeds up the mortgage application itself.

In fact, independent brokers often have more administrative support and better technology to track applications across dozens of different lenders. Because they work for you, they are often more motivated to chase lenders and keep the process moving than a corporate-bound in-house adviser might be.

Do you have to use your estate agent’s solicitor?

Just like mortgage brokers, you are under no obligation to use the solicitor (conveyancer) recommended by the estate agent.

Agents often receive a significant referral fee for "selling" you a specific solicitor. These recommended firms are often "conveyancing factories" located far away, handling huge volumes of cases with little personal service. You are almost always better off finding a local, reputable solicitor or a highly-rated independent firm that offers transparent pricing.

What to look for in a mortgage broker

If you decide to go independent, here is what you should look for to ensure you’re getting the best service:

• Whole-of-market: Ensure they aren't restricted to a small panel of lenders.

• Transparent Fees: Some brokers charge a flat fee, some take a commission from the lender, and some do both. Ask for a clear breakdown upfront.

• Specialism: If you are self-employed or have a complex credit history, look for a broker who specializes in those areas.

• Check Reviews: Look for independent feedback on platforms like Trustpilot or Google to see how they handle delays or difficult applications.

The pressure to use an estate agent’s in-house services can be intense, but remember, you have the right to choose who will manage your finances and legal protection. By opting for an independent broker, you gain access to the widest range of deals and ensure that the person handling your mortgage is 100% on your side.

Ready to find the right deal for your new home? Don't settle for the first offer you see. Get started to speak to one of our independent whole of market brokers today.