Figures from the Land Registry for 2011 show that the number of law firms conducting conveyancing is contracting hugely. 1300 fewer firms made applications for registration in 2011 compared to 2010. That trend is likely to continue for a number of reasons.
1. Numerous lenders are cutting down the size of their solicitor panels. In recent times, Lloyds, Santander, Nationwide, Northern Rock to name just a few have culled their panels significantly. In a rather more high profile move HSBC have reduced their panel to a mere 43 firms, managed by Countrywide. This has attracted a fierce response from the solicitors’ profession on the basis that it is anti competitive, restricts consumer choice and so on. HSBC claim it is in order to combat rising mortgage fraud although we personally do not see how having so few firms where in many cases they may not even meet the client would have the effect of reducing fraud.
2. The development of the Law Society’s Conveyancing Quality Scheme where more than 1000 firms are now accredited has in our view sorted the weak from the strong. Only those firms with rigorous processes in place can start up to the auditing and scrutiny of the CQS. This has created a somewhat smaller but trusted pool of conveyancing firms where it seems likely that membership will be a criteria for most lenders in future, hence those that have not applied will find their business restricted.
3. Professional indemnity insurers view conveyancing as seriously high risk work and claims data seems to bear out this fact because a large percentage of claims relate to conveyancing work. Hence, premiums for those conducting high proportions of this type of work are steadily increasing and in the case of small firms, make it prohibitive to carry out conveyancing where the fees charged are simply insufficient to cover the costs.
4. Fee resistance. Consumers are more and more choosing their law firm on price and price alone. Hence those larger outfits that can churn and burn the work are more likely to attract the business.
At Darlingtons, we were early members of the CQS. Our systems stand up to the ultimate scrutiny. As a result we are not penalised too heavily by indemnity insurers for conveyancing work and have not been taken off lender panels.We provide a cost effective conveyancing service led by solicitors and partners not paralegals. We communicate properly with our clients and make sure that the process is as seamless as possible. As the market retracts we continue to grow in conveyancing.
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