What is conditional selling and is it illegal?

Buying a property is exciting, but it can be stressful dealing with an estate agent, solicitor, mortgage broker, and lots of paperwork.  

When you make an offer on a property, the estate agent may claim that you must use their other financial services, such as their conveyancer or mortgage broker. 

While it’s acceptable to recommend other services, forcing someone to use these is known as conditional selling – and is illegal. 

We explore what conditional selling is, how it works, and what to do if you’re faced with this.  

Summary 

• Conditional selling is illegal but still a widespread issue impacting buyers and sellers. 

• Estate agents cannot force you to use their financial services and cannot discriminate against those who use other mortgage brokers and conveyancers.

• We reveal what to consider if you’re thinking of using an estate agent’s financial services and the risks involved. 

• Unbiased can quickly match you with a qualified mortgage broker.  

What is conditional selling? 

As we mentioned, conditional selling is when an estate agent says a prospective buyer must use their in-house broker or conveyancer so they can give their offer to the seller. 

An estate agent might also imply your offer will be submitted more slowly or less likely to succeed, or the homebuying process will take longer than anticipated if you choose to go with another provider. 

They might even claim not to allow viewings if you don’t use their in-house financial services, including getting a mortgage in principle from their broker (even if you already have one). 

Conditional selling has increased in recent years, with a survey by Access Financial Services revealing that 63% of their mortgage advisers stated their clients have experienced this practice between November 2023 and May 2024.  

Many industry experts have called to get rid of the widespread issue of conditional selling.  

Is conditional selling legal? 

Conditional selling is illegal. Under the Estate Agents Act 1979, every offer for a property must be given to the seller. 

Estate agents cannot discriminate against prospective buyers if they don’t want to use their in-house services. 

However, during a difficult property market or areas popular with buyers, conditional selling can happen.  

It’s also worth flagging that estate agents usually get a referral fee if you use their broker or conveyancer, so there’s a financial incentive.  

You can back out of a conditional sale if no contracts are signed.  

Why is conditional selling an issue, and how can it impact me? 

Conditional selling is an issue as it pushes prospective clients to use specific mortgage brokers or conveyancers, which could be more expensive. 

It also discourages potential buyers from shopping around for a broker or conveyancer that suits their needs or could be more cost-effective. 

Buying a property is a major life decision, and you should be confident in the experts you choose to help you achieve this goal. 

It’s always a good idea to check reviews from previous customers, as well as the qualifications and expertise of the broker or conveyancer you plan to use.  

As for sellers, conditional selling may discourage potential buyers from submitting any offers, impacting the price you sell for.  

Estate agents may also use conditional selling on sellers looking to buy a new property (if they haven’t found one yet). 

If an estate agent gets a lot of income via referral fees, they may charge less; however, the service may be of a lower quality and encourage conditional selling, potentially pushing away buyers with a bigger budget.  

Do only estate agents use conditional selling? 

Developers of new builds are also known to use conditional selling on prospective buyers by pressuring them to use their recommended mortgage broker or conveyancer.  

Again, this is illegal, and you have the right to choose who you want to work with.  

Should I use an estate agent’s mortgage broker or conveyancer? 

It’s your decision whether you use an estate agent’s mortgage broker or conveyancer, although you shouldn’t be pressured into this. 

If you don’t want to use their broker, make this clear and clarify that they are sharing all the relevant information with the seller, including that you have a mortgage in principle and your offer. 

You could also ask your mortgage broker if they can talk to the estate agent.  

However, if you decide to use the estate agent’s mortgage broker, make sure you clarify: 

• Do they have access to the whole market? This means the broker has access to all deals from every mortgage lender, not just a selection.  

• What are the fees? Mortgage brokers who work with estate agents tend to charge a fee, which can be higher than elsewhere (while some brokers are free to use). However, some brokers help with your application and sourcing relevant insurance policies, as well as helping with remortgaging in the future. 

• Are they well-reviewed? You should have a look at the reviews from other customers online to see whether the estate agent’s recommended broker provides a good service.

• The terms and conditions: It’s wise to check these so you understand how your broker works, what fees are charged, and what services they offer.  

If you’re unsure about anything, ensure you ask the broker to clarify. You can also ask whether they can match any fees found elsewhere. 

When considering a conveyancer, it’s worth asking the above, especially regarding fees, as those that work with estate agents can be more expensive. 

You should also ask the conveyancer if there are any lenders they don’t work with, as this could mean you miss out on competitive deals, or you may need to switch solicitors to access a certain lender. 

This can slow down the homebuying process and you’ll need to pay even more in fees. 

It’s worth taking into account that recommended conveyancers can be busier due to referrals (who they pay estate agents for), which can impact the quality of work. 

There’s also potentially a conflict of interest if the potential buyer and seller use the same conveyancer. 

What you should do if you encounter conditional selling 

As conditional selling is illegal, you could complain about this practice to the estate agent so they can stop it from happening in the future and potentially offer compensation. 

Make sure you have written evidence needed to support your claim.  

You can check if the estate agent is registered with the Property Ombudsman or Property Redress Scheme, who may be able to address this, potentially with compensation. 

Also, conditional selling should be reported to the Trading Standards for investigation. 

Need help finding a qualified mortgage broker? 

Buying a house is a huge life decision, and there’s much to handle, whether it’s a mortgage application, finding the best rates, providing proof of income, or moving. 

However, you don’t have to do this alone – a qualified mortgage broker can alleviate this burden. 

They can help assess your application, collate the evidence, and recommend the right mortgage deal for your unique circumstances. 

All mortgage brokers listed with Unbiased are regulated by the Financial Conduct Authority (FCA). 

Unbiased can quickly match you with the ideal mortgage broker.