Copy article

Persimmon sales adviser says buyers of Homes England property cannot use a fee-charging broker

ended 19. August 2024

A fee-charging broker who had been overseeing a client’s purchase of a shared ownership property from a Persimmon site in the East Midlands (Holdingham Grange), and had completed the free affordability check via the Homes England calculator, was recently told by a sales adviser at Persimmon East Midlands that Homes England will not allow buyers to use a broker who charges fees — in this case of £495. The exact copy from the Persimmon sales adviser is below.

“As the scheme is funded by New (sic) Homes England, one of their stipulations on the terms and conditions is that all buyers cannot pay a fee for their mortgage broker, this is the terms of the funding set by New (sic) Homes England scheme. This has only come to light as we are due to have a audit next week and we've had our legal team and an internal auditor going through everything to make sure everything is as it should be and its been picked up. Therefore the options are NAME at BROKER FIRM waves (sic) the fee and continues with the mortgage application, or you can get NAME at The Mortgage Store to take over your application you have previously spoken with her she doesnt (sic) charge a fee and is also currently doing a mortgage with the same lender (together) for one of my other customers, otherwise it'll be a case of withdrawing from the property.
 
Upon receipt of this email, the broker emailed Homes England and received the following response from a manager at the Homes England Affordable Home Ownership team:

“The expectation from Homes England's perspective is that the affordability check of a customer must be undertaken free of charge to the customer, so as an advisor you cannot charge the customer a fee for this activity. When matters progress, and you are submitting a mortgage application on behalf of a customer there is nothing in our guidance to prevent you from charging a fee for this service. Providing an advisor does NOT charge the customer a fee for conducting their affordability assessment, and only goes on to charge a fee once they had been engaged by the customer to submit a mortgage application on their behalf, their actions would not be deemed to have contravened our guidance.”

They added:

“Providers must not require that an applicant takes out their mortgage through a particular advisor, irrespective of whether they undertook the financial assessment to ascertain a suitable mortgage level or products). Also, they may not receive financial (or other) incentives from advisors in return for inclusion on their panel.
I hope this clarifies Homes England's position in respect of this aspect of the guidance. I have cc'd in the team at Holdingham Grange, and if either you or they have any further queries on this topic you are of course welcome to come back to us.”
 
The Persimmon site in question, Holdingham Grange, has still not responded to the broker, whose client is now in a position where she has paid for advice and the valuation but may not be able to proceed unless the broker waives their fee or the client uses The Mortgage Store.

Newspage asked brokers and property experts for their views, bottom. 

11 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Emma Jones
Managing Director at Whenthebanksaysno.co.uk
To pressure buyers into using a broker firm that sits within, or is tied to the house builder, just doesn’t sit right under the Consumer Duty rules the FCA has been banging the drum about. Many buyers, especially first-time buyers, don’t know who is being honest and who is unfortunately prioritising their pocket over the right thing for the borrower. This practice of conditional selling needs to stop. It may be that now is the time for builders to lose control of choosing preferred broker firms as the go-to for their sites. Because this is clearly an example where they haven’t listened to Homes England's guidelines.
Copy

Editor
Michelle Lawson
Director at Lawson Financial
Thankfully, Homes England have clarified the correct position but how many borrowers have had a catastrophic outcome and been forced to change broker, lose their mortgage product, or lose their property to their detriment? In a Consumer Duty world the borrower and buyer should be at the forefront and companies should ensure that staff are equipped with accurate info when passing the detail on. Conditional selling is not acceptable.
Copy

Editor
Ben Perks
Managing Director at Orchard Financial Advisers
The Devil is in the detail and Persimmon have possibly disadvantaged borrowers by misunderstanding the small print.
Copy

Editor
Rohit Kohli
Director at The Mortgage Stop
When we heard about this it was shocking to think that Homes England would put this kind of restriction on potential borrowers that would have the effect of limiting choice and in many cases pushing people out from being able to buy because of their complex circumstances. However, thankfully Homes England was able to clarify the situation and at best it's just someone at Persimmon that has interpreted the rules incorrectly and at worst another example of conditional selling that's rife in the industry and continues to go unchecked. For the borrower's sake in this example, I do hope they are not disadvantaged and lose their potential new home due to either scenario.
Copy

Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
We've got another bunch of cowboy corporates. This time it's Persimmon Homes playing fast and loose with conditional selling by the looks of it. This dirty trick is as common in the housing market as a tumbleweed in the desert. It's high time someone lassoed these crooks and dragged them into the light. The Ombudsman is as useless as a one-legged cowboy in a bucking bronco contest. So, I'm calling on the Housing Minister to ride in and clean up this mess. It's time to unleash hell on these corporate vultures once and for all.
Copy

Editor
Simon Bridgland
Director at Charwin Private Clients
Conditional selling is the industry equivalent of a cancer. This type of issue still plagues many estate agents and is regularly being shoved in the face of house buyers, who, through fear or despair, often face no other option but to be led up the garden path. Dirty tricks often used on unsuspecting buyers are dressed to look like it's to help them get the home they want. Reasons such as, we need to qualify your offer, the vendor wants us to check all buyers, it will help with your offer, to name a few. All of which are simply designed to coerce buyers into using an agent’s adviser or preferred adviser for nothing more than money, in the form of kickbacks. Now it seems, it's not just bully boy tactics of a shoddy estate agent, but the developers are muscling in. When a company like Persimmon are using such awful tactics then things have gone way beyond too far. Such practices rage against Consumer Duty rules and could leave buyers out of pocket.
Copy

Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
Persimmon are clearly applying the same level of attention to detail and quality control to the auditing of their processes as to their house building. If their auditors actually did advise them incorrectly, let’s hope they waive their fee. However, more likely this was a thinly veiled attempt to push conditional selling on a first-time buyer. Perhaps get to work on building the 1.5 million new homes the government has mandated and allow buyers to choose for themselves who they entrust with guiding them through the process and what they are willing to pay for that service.
Copy

Editor
Dariusz Karpowicz
Director at Albion Financial Advice
Misinterpreting and giving false information, as seen with Persimmon, just to secure a commission, is exactly what shouldn’t be happening in a regulated industry that’s supposed to act with integrity. This isn’t about integrity; it’s about bending the truth to make a living, and it needs to be investigated, scrutinised, and stopped. Unfortunately, this kind of behavior isn’t rare in our industry, and it’s shocking that not enough is being done to address it.
Copy

Clive Read
Owner at Goldmanread
Clearly there are a lot of things wrong with this sales advisers response apart from just his apalling grasp of grammar. Unfortunately as Borkers we are very used to estate agents trying to game the system and exploit buyers naievity and desperation so that they can earn some extra commission. My clients often tell me about being pressured into meeting with an agents mortgage broker to "check their affordability", even when I have already arranged an agreement in principle for them. Given the competitiveness of the market I can only see that these kind of misdeeds are going to continue as House Prices start to tick up again. The consumer needs to be protected and though there is already guidance from The estate agents professional body to avoid this kind of behaviour I can only see things getting worse.
Copy

Hannah Bashford
Director at Model Financial Solutions
I'd like to give Persimmon the benefit of the doubt and hope that they have simply misinterpreted the rules instead of this being another example of underhand tactics to get an unsuspecting buyer to use their recommended advisers. That being said, this type of practice is still out there as the email shows and it is very worrying as it confuses and worries clients and can leave them upset about their options. Kick backs and incentives paid to sales people from a 'recommended' adviser on a new build site that uses a Government scheme should be banned. That would mean these tactics are stopped and clients are then using who they want and getting the best outcome for them.
Copy

Patricia McGirr
Founder at Repossession Rescue Network
In a week where we had lenders cutting out brokers by offering borrowers a better mortgage rate, we now have 'big builders' supported by a goverment cutting our brokers who charge for their valuable advice and services. I'm the first to look for ways to help borrowers save money in times of financial stress, but this is a step too far. Shame on you Persimmon. Even though this seems to be a case of not reading the small print, it's just not cricket.