by Mark Johnston
Banking giant HSBC has denied that its conveyancing panel is closed to new firms following criticism from lawyers.
The HSBC established a panel of solicitors and licensed conveyancers to provide the required legal services to their home buying mortgage customers.
The bank selected Countrywide to manage the panel of solicitors and licensed conveyancers, therefore if a customer elects to use a member of the panel, the bank will use the same firm, speeding things along.
HSBC, which last year increased mortgage lending by 12% to £13.2 billion and they expect to increase that to £15 billion, said customers will experience a number of benefits from using a law firm based on its panel. These include competitive fixed fees and free searches to name but a few.
Recently news has surfaced that the HSBC has reduced its conveyancer panel of only 43 firms to 40 firms, which it seems is causing delays for its home buyers. Also the Law Society believes that the decision is having a detrimental impact on the local communities.
The chief executive of the Law society, Desmond Hudson, said “evidence of delays was emerging from home buyers using the HSBC and that estate agents were beginning to associate HSBC customers with hold ups to the process which in turn threaten what was already very delicate property chains”.
With this in mind some estate agents are now advising caution to consumers who are considering an HSBC mortgage.
Laura Peters, of Pickwick estate agents London, said she had seen several sales nearly fall through as a result of these delays.
The council for Licensed Conveyancers (CLC) has also entered in to the row over the HSBC’s conveyancing panel; they expressed concern that the limited size of the panel risks inadvertently restricting consumer choice and distorting competition in the market.
The regulator has called for the lender to put consumer choice, transparency and fairness first, they warned that if not it might insist on separate representation.
The bank however, maintains that their panel arrangements “support consumer choice at competitive fees”.
An e-petition has also been drawn up and lodged by conveyancing expert Rob Hailstone; it calls for the government to put pressure on to the HSBC to reverse its decision to cut its panel to 40 firms.
Rob Hailstone said “the problem with issues of this type is that large institutions are walking all over smaller individuals or businesses”.
Some experts feel that this panel not only adversely affects a property buyer with an HSBC mortgage but also everyone in that particular chain of transactions including estate agents and financial service providers.
The Law Society has recently accused HSBC of ‘unreasonable behaviour’ and of giving misleading information to firms wanting to join its panel.
A spokeswoman for the bank stated “the panel is not closed and firms are invited to register their interest so that they can be contacted as and when opportunities arise. We are reviewing the panel on an ongoing basis”.
The bank has admitted that there are ‘limited opportunities’ in certain geographic regions, but they also add that no firms have been removed from their panel.
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