The agreement between HSBC and the Law Society will see HSBC amend its conveyancing approach. Previously less than 50 firms on a designated HSBC panel were able to act for both the borrower and lender, with all other firms able to act for the borrower only.
That decision was much criticised and now nearly 1,500 CQS firms will be able to act for HSBC. CQS-accredited sole practitioners able to work on all cases with mortgage values up to £150,000. The new arrangement will be introduced in August 2012.
Both HSBC and the Law Society will continue to work together to raise the £150,000 limit for CQS sole practitioners, while HSBC will assist with the development of the CQS assessment scheme. HSBC also suggested inviting other mortgage lenders to assist in this area.
Martijn van der Heijden, head of lending at HSBC, commented: “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.
“We are committed to helping our home-buying customers and have set aside £15 billion to lend in residential mortgages this year.”
Chief executive of the Law Society Desmond Hudson (pictured) said: “With this move HSBC is demonstrating its commitment to putting customers first as well as its confidence in the CQS scheme.
“The Law Society and its members have campaigned for this change in the interests of solicitors’ home-buying clients since HSBC introduced its original panel.
“HSBC’s willingness to engage with us has helped secure a good outcome for their mortgage customers, our CQS members and the house buying public.”
From August, HSBC mortgage customers will be given three options when appointing a solicitor or conveyancer.
Option one will be to use one of the current managed panel firms. These are conveyancers who can act for the bank and the borrower and who have signed up to offering fixed fees and other guarantees including no sale, no fee.
The second option will be to use CQS members who are not on the managed panel. CQS members will not be obligated to commit to the fees set by the bank, or purchase a technology link to the Bank’s panel manager.
Option three remains available for borrowers who wish to choose another firm of solicitors or conveyancers not in the other two options. In this instance, as was previously the case, the borrower will pay £160 + VAT for a panel firm to complete the legal work required by HSBC.
John Clay, chairman of the Society of Licensed Conveyancers, welcomed the move: “The HSBC’s decision to open its panel to all CQS members demonstrates that the lender has clearly listened to the legal profession and is prepared to make changes to ensure a fairer and more positive experience for both consumer and conveyancer.”
Rob Hailstone, founder of Bold Legal Group, added that he was pleased with HSBC’s decision, but that further work still needed to be done: “Over the past few months, the Bold Legal Group and others have campaigned relentlessly against the draconian changes introduced by HSBC in January.
“What is of the utmost importance now is getting as many lenders as possible to agree to a uniform system or process. The public, lawyers, estate agents and others are fed up with the current scattergun approach and it is time for change.”
Head of IBB’s private client group, and residential conveyancing partner, Gillian Outram comments: “This is a victory for consumer choice. The Law Society introduced the Conveyancing Quality Scheme (CQS) in 2011 and have now successfully negotiated with HSBC to include CQS solicitors firms on their panel from August 2012.
“Homebuyers can be confident in the quality of their conveyancer by choosing a firm with the Law Society’s Conveyancing Quality Scheme accreditation, which guarantees integrity, good practice management, efficient conveyancing procedures and non-tolerance of fraud.”