HSBC has opened a new front in the conveyancing war by launching a panel of just 43 law firms to handle its mortgage work, which customers will not be obliged to use as well – but it will be much cheaper if they do.
The new scheme launches on Monday, with the panel of solicitors and licensed conveyancers managed by Countrywide. All the solicitors are members of the Law Society’s Conveyancing Quality Scheme.
HSBC said customers who choose to use one of the panel firms “will have the advantage of competitive fixed fees, as well as benefiting from the speed, efficiency and consistent quality of service provided by the firms on the panel”.
Home buyers using a panel firm will pay £399 for a property worth up to £100,000, rising incrementally to £549 for properties valued at £300-500,000.
Warning customers who use their own solicitor or conveyancer that they will also have to pay HSBC’s legal fees of £160 + VAT (£192), the bank offered two other benefits to those who use a panel firm and the sale falls through: they will not have to pay the legal fees and repeati
ng searches on a replacement purchase within six months will be free.
Peter Dockar, head of mortgages at HSBC, said: “Our new panel arrangement will spare customers the time and hassle of searching for a firm to do the important conveyancing work on their new property.
“Customers who choose to use a firm on the panel can benefit from agreed conveyancing costs as well as valuable guarantees should the seller pull out. We also believe this will provide additional protection for our customers and HSBC.”
While welcoming HSBC’s requirement that panel solicitors are CQS accredited, Law Society chief executive Des Hudson said he was concerned that the size of the panel might not provide sufficient consumer choice.
“Although HSBC has a relatively small share of the mortgage market, such a low number of firms could struggle to provide all consumers – those who struggle to communicate other than in person or those who would prefer to use a local solicitor with the service they seek.”
Mr Hudson said it was disappointing that HSBC failed to consult the society. “I suspect they have made the calculation that the majority of their customers will opt to use the bank’s solicitor. Being on a panel such as that will be valuable. How long will bankers resist the temptation for a quick profit by selling places on that panel and putting up costs for house buyers?
“This is not in the long term interests of consumers. HSBC should reconsider.”