Watchdog Probes House Price ‘Rip-Offs’

Aug 20, 2008

Mortgage brokers are being investigated over allegations that some of them colluded with estate agents to inflate property prices and rip off homebuyers.

In an unprecedented move, the Financial Regulator is checking claims that brokers have illegally shared data about how much people could afford to pay.

The sweeping probe comes after persistent claims that brokers may have used housebuyers’ financial information to artificially inflate house prices by pushing buyers to the absolute limit of their spending power.

That has now come back to haunt the thousands who are suffering negative equity — where people end up owing more money on their property than it is worth.

The fear is that some people were forced to pay too much for their houses as estate agents and brokers illegally traded information on what people could afford.

Most brokers have legitimate referral agreements with estate agents, and there is no suggestion of any illegal collusion.

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