Seemingly negligible increase in Land Registry fees should not be understated – Tosetti

Indeed, back in September when that announcement was made, it might have barely caused a tremor, but on 9 December, those fee increases will be introduced and they, of course, add extra cost to all property transactions regardless. 

Again, we are not talking about cost increases that are likely to blow a transaction off-course, but in some cases, they are more than double the current charge, and in one case, a 400% increase. 

So, as you might already know the cost of an inspection of an individual register or plan and an official copy of an individual register or plan – by electronic means – is going up from £3 to £7, while the registration, cancellation or rectification of an entry per name is going from just £1 to £5.

Searches submitted by paper will increase by £6 and official copies will go up by £5. Not just inflation-busting, but many times the previous cost.

The Land Registry quite rightly points out these costs have not shifted in 10 years and it needs the money to deal with the increased costs of running it.

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However, while recognising these charges might be seen to pale into insignificance when compared to a lender’s arrangement fee, or a valuation fee, or an early repayment charge (ERC), for example, how many businesses would feel justified in increasing their fees by 400% in one fell swoop? 

Who do these costs fall on? 

This leads me to question who bears the burden for such costs.

Particularly in the remortgage space, whereas a portal for advisers to access quality conveyancing firms and to recommend products for remortgaging (and sale and purchase) clients, we certainly have to be cognisant of what it could mean for all stakeholder income, not least the client. 

We believe this will add around £16 of cost to a transaction.

What might this mean for the remortgaging client, who might not even know the fees have gone up, but also for advisers and conveyancers, who could be impacted on every single transaction? 

That being the case, we have made the decision to absorb these increases in cost across our most popular remortgaging products – our Cashback and Fixed-Price Remortgages. 

We think that is fair because it means the adviser’s referral fee is not impacted; the client can continue to get their own legal representation from a specialist conveyancing firm at no extra cost; plus, the conveyancing firm itself can continue to deliver the service for the same fee as before these increases were introduced. 

Effectively, and we of course recognise it’s a relatively small part of the overall costs of remortgaging, we don’t believe it’s fair to pass it on for those choosing these remortgage products.

Putting clients off remortgaging

For advisers in particular, we’re acutely aware that income levels might have been impacted significantly in recent years, particularly as product transfers (PT) have dominated the refinancing option for many existing borrowers.

PTs clearly come with some genuine income consequences for advisers, with most lenders paying far less of a proc fee, plus for clients who are PT-ing, it is often more difficult to provide a full range of ancillary services.

Therefore, when there is a remortgage opportunity, it seems absolutely right and proper that advisers get to keep all of the referral fee they earn via conveyancing recommendations, rather than – as some might do – take these extra costs off it. 

A rise in any costs is not going to be welcome, but there are options available that ensure the hit is not as hard for those who might feel it the most.