More restrictions on conveyancing panels
Conveyancers are facing an unprecedentedly difficult time and further news this week will do nothing to improve their mood.
Whilst something clearly needed to be done about the system where there were no real quality checks on the standard of conveyancing, with many law firms and licensed conveyancers offering conveyancing at a ridiculously low price, a cartel is perhaps also not the answer.
Historically, estate agents have increasingly controlled the conveyancing food chain, with solicitors becoming ever more dependent on estate agent’s favour, but now it’s the lenders that are increasingly seizing the initiative.
So, to this week’s news – HSBC has announced that it will only now allow a panel of just 40 law firms to handle its mortgage work. Bearing in mind property buyers usually instruct the same solicitor as is sued by the lender, or more accurately historically, the buyer chooses a solicitor and almost all are accepted on panels, this means that buyers going with an HSBC mortgage face a stark choice – use HSN+BC’s lawyers or pay a lot more (2 fees in effect) and possibly face hurdles and obstacles.
Buyers who agree to use an HSBC panel firm will pay conveyancing fees of £399.00 plus vat as a minimum, rising in bands depending on the purchase price. If they opt not to use the HSBC panel firm they will need to pay HSBC’s legal fees of £160.00 + VAT (£192) plus their own fees. It will be interesting to see how client react to this, especially those who have happily used solicitors previously.
Who gets to be on the select panel? It appears that HSBC have opted for panel firms affiliated with Countrywide Surveyors & Estate Agents. Why this is the case we are not clear.
Whilst HSBC is a relatively small player in the mortgage market, many of the main lenders have severely cut their panels in the last 2 years and this latest move may herald an ever more elite group. That’s fine in some ways, but allegiances and arbitrary decisions are perhaps not the best way for lenders to approach such matters and the restrictions do clearly fetter a customers discretion.. If solicitors sought to do such a thing they would be in breach of their practice rules, so there obviously isn’t a level playing field.
What do you think ?