Ok there is nothing to stop this happening and in fact it can be quite common practice with some agents, this isn’t to say it’s right.
It is unlikely that the FA will be able to get a better price for your mate on the property but they are just trying to tie him to using the agents advisor on the basis that “I got you a good price on the property on the basis you use me for the mortgage”!
If i were your mate I’d also be wary of someone who knows what the maximum I can afford to go to and who relies on the agents who are selling the property he is looking to buy negotiating a price for me because your bargaining position is compromised. It’s like playing poker with your cards face up on the table while everyone one else holds theirs close to their chest!
Data protection act should apply but won’t cover this I’m afraid.
To be fair if this is the only way the FA can get clients to use him then there is something wrong with him and/or the agents. It’s underhand but does happen and currently if people are stupid enough to believe that the FA will get them a better price then buyer beware. Again I’m not saying it’s right but there is very little protection for buyers when it comes to agents trying to keep everything in house.
It’s an area that keeps on being bought up as unfair but no one seems willing or able to do anything about it.
This is all said as an FA of 15 years who relies on agents passing me business and NEVER having had too resort to these sorts of tactics!
Tell your mate to deal with the agents directly himself and use who he feels comfortable with for the mortgage and legal work.
Good luck 🙂