TikTok users taken to task over unqualified promotion of property sales
A warning to estate and letting agents exploring the video social app TikTok to sell houses – be careful what you say as it may be falling foul of the law.
TikTok is becoming an increasingly popular tool for estate agents to show and promote property, especially to the younger audience who are familiar with the app. But research by Online Mortgage Advisor has shown that it’s also being abused and many of the posts stand outside the law on giving investment advice.
‘Property influencers’ who are effectively offering financial advice via TikTok videos or suggesting investors can ‘get rich quick’ without carrying legally-required disclaimers and statements regarding their qualifications, are breaking the law, according to Online Mortgage Advsisor.
The research, which covered the US and the UK, found that:
• One in four of the TikTok videos in our analysis featured misleading content about purchasing real estate.
• The misleading property content identified in the research has totalled 10.1 million views and almost 1 million likes.
• The influencers in the analysis who were found to have posted misleading content have a combined total of 11.8m followers.
• Nearly all (99%) of the videos in our analysis did not contain a disclaimer and none of the account bios we looked at contained a disclaimer either.
• More than 1 in 20 of videos, featured an influencer bragging about how much money they had made through property purchases and suggesting to their viewers that they would be guaranteed profitable returns by following the influencers’ methods.
• Only 4 out of 10 of the influencers analysed were transparent about their qualifications in relation to property investment (or lack thereof) in their bios or videos.
The law however, does not require disclaimers or qualifications for individuals or organisations give ‘guidance’, according the Financial Conduct Authority (FCA). Only those given specific recommendations about a person’s particular investments constitute ‘advice’ and should carry disclaimers or have FCA regulation.
One UK agent currently using TikTok to explain property investment is David Heron of Central Properties in Leeds. who has an impressive 23,500 followers. Neither his account nor his videos carry investment qualifications or disclaimers, though his videos appear to be guidance rather than specific advice, so they wouldn’t need to – but it shows there is a fine line to tread. His account can be seen here:
The Negotiator contacted Mr Heron for his view on the subject, but he has not yet returned our call.
Pete Mugleston (left), MD of Online Mortgage Advisor, commented, “Worryingly, our research revealed a considerably high proportion of videos giving property investment advice on TikTok, an app that’s most popular in the UK with those aged between 18 to 34.
“Of these videos, we flagged one in four as misleading, and the majority (64%) of their creators didn’t mention having any qualifications or professional experience in real estate – something you should certainly look for when taking financial advice.”
In total, Online Mortgage Advisor analysed 624 videos. TikTok data was retrieved and analysed between 7th March 2022 to 11th March 2022.
The full research can be found here.