HSBC has today caved into pressure from the Law Society and estate agents, and agreed that the 1,400 law firms operating under the Law Society’s Conveyancing Quality Scheme (CQS) mark can act for the bank – and they will not have to work under its fixed-fee regime either.
There has been uproar since January when HSBC slashed its panel to just 43 firms, saying that while mortgage customers could use non-panel solicitors, they would have to pay extra for the bank’s separate representation.
The Law Society argued against the restriction in choice this caused, while there have been growing reports of the arrangement causing delays, and estate agents warning buyers off seeking their mortgage from HSBC.
The new deal takes effect from August 2012. CQS members will not be obliged to commit to the fees set by the bank, or purchase a technology link to the bank’s panel manager, Countrywide.
Initially CQS-accredited sole practitioners will only be able to handle transactions with mortgage values up to £150,000, but the society and HSBC said they will work together to raise this.
The existing panel will remain and be an option for borrowers, with fixed fees and other guarantees, including no sale, no fee. Fixed fees range from £399 to £549, depending on the value of the property. Borrowers will still be able to use a firm not on this panel or with CQS, but will have to pay £160 + VAT for a panel firm to complete the legal work required by HSBC.
The society said it recognised the merit in some of the different requirements HSBC has imposed on its panel, and so has invited HSBC to assist in further developing the CQS assessment scheme so that it becomes the automatic requirement for a firm to join a mortgage lender’s conveyancing panel. It said HSBC has suggested the Law Society consider inviting other mortgage lenders to assist, which the society was “delighted to accept”.
Martijn van der Heijden, head of lending at HSBC, said: “We introduced our panel in January to provide additional protection for both our customers and the bank. We listened to feedback from customers and solicitors, and through working with the Law Society can now agree to more solicitors acting for us while also managing our risks and maintaining the unique benefits of using one of our panel solicitors.”
Law Society chief executive Desmond Hudson said: “With this move HSBC is demonstrating its commitment to putting customers first as well as its confidence in the CQS scheme. The bank has been constructive in working with the Law Society, in designing this solution. As well as giving its customers a much wider choice of solicitor that can also act for HSBC, it has aligned itself further with the CQS and the high standards the scheme represents.”