Estate Agents Under Fire: Panorama Uncovers Unethical Practices at Connells and Purplebricks

A recent investigation by BBC Panorama has exposed concerning sales tactics employed by two leading estate agencies in the UK, Connells and Purplebricks. The findings have raised serious questions about their commitment to ethical conduct and fair dealing, highlighting potential conflicts of interest and pressure to use in-house services. This investigation, which included undercover reporting and examination of internal communications, paints a picture of a real estate market where profit motives may sometimes overshadow the best interests of clients.

The Panorama investigation, titled “Undercover Estate Agent,” revealed a range of issues, from prioritizing in-house services to potentially overvaluing properties to secure listings. The probe has sparked outrage and calls for stricter regulatory oversight within the industry.

Connells: Questionable Practices and Prioritizing Profits?

The investigation uncovered evidence suggesting that Connells, a prominent UK estate agency, may be prioritizing its own financial gains over the best interests of its clients. Undercover reporter, Lucy Vallance, working for Connells’ Abingdon office, observed concerning practices during her six-week tenure. The investigation centered around Julie Gallagher, a homeowner who believes her property was sold for less than its true market value due to the agent’s tactics. The agent appeared to favour buyers willing to utilize Connells’ in-house mortgage services.

In one instance, Ms. Gallagher’s agent seemed to have sidelined a potential buyer who could have offered a higher price for her home, focusing instead on a buyer who agreed to take out a mortgage through Connells. The financial incentives for the company were clear: the mortgage could be worth around £2,000 to Connells, along with an additional £10,000 from add-on services and selling the buyer’s property. “She sat on this sofa… and said she was actually working for me and she obviously is not, she’s working for the company’s ends,” said Julie. “How dare Connells do that? Just appalling.”

The investigation revealed that “conditional selling” – a practice forbidden by the Code of Practice for Residential Estate Agents – may be occurring at Connells. This involves agents pressuring potential buyers to use their in-house services. The undercover reporter also captured evidence of Connells’ senior branch manager acknowledging that conditional selling was not allowed, yet the practice continued.

“Hot Buyers” and Prioritized Deals

Connells employees appeared to prioritize clients using the company’s in-house services. The undercover reporter observed that arranging mortgages could be just as important as selling houses. Internal communications identified prospective buyers who agreed to Connells-brokered mortgages as “hot buyers.” These individuals seemed to receive preferential treatment.

Lisa Webb, a consumer law expert with Which? Magazine, reviewed Panorama’s evidence. “This is absolutely something that should be against the law – and something that I think that these estate agents really ought to be investigated by the authorities for, because this should not be happening,” she stated.

When the undercover reporter informed the office administrator about a potential cash buyer, who might have offered more, the reporter was told that “just a sale” was “not good enough” for Connells. The administrator further elaborated that the company would likely prioritize those who used in-house services. Connells, in its defense, denies these accusations and claims that no harm was caused to the customer.

Purplebricks: Overvaluation and Pressure Tactics

The Panorama investigation also focused on Purplebricks. A whistleblower, who worked for the company, recorded meetings and communications, expressing concerns that staff were incentivized to overvalue properties to secure listings. The whistleblower stated staff could earn commission if they convinced sellers to drop their asking prices. The whistleblower said, “We are overvaluing properties massively just to gain instructions.”

The whistleblower also documented pressure to promote and sell financial products. Ryan Evans and Olivia Phelps, first-time buyers who purchased a home through Purplebricks, were steered toward the company’s conveyancing services and ended up paying nearly three times the price of the cheapest quote, according to Panorama’s findings.

Purplebricks responded by stating that it no longer incentivizes price reductions and that it does not overvalue properties. However, the investigation revealed that staff are still encouraged to sell additional financial products to clients.

The actions of both Connells and Purplebricks have raised serious questions about their business practices. As the housing market remains a significant financial aspect for consumers, these findings serve as a call to action for homeowners and regulators to ensure fair practices.

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