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BM Solutions says free legals taken by two-thirds of customers

by: Tim Chen
  • 05/10/2017
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BM Solutions says free legals taken by two-thirds of customers
BM Solutions has reported its just-launched 'free legals and valuations' offering has proved a popular option used by around two thirds of its customers since launch on 20 September.

The specialist buy-to-let lender also provides a £250 cashback on its deals.

This is a part of a wider market trend in providing free legals for remortgage customers and according to Moneyfacts, conveyancing packages aren’t the only benefit, as valuation and cashback offers also prove popular. Of the 3154 mortgage products that offer free valuations, 2475 are remortgage offers with 874 remortgage cashback deals.

The practice of providing free conveyancing, has received criticism in recent months due to concerns over service quality and delays as legal firms and panels struggle to cope with higher remortgage volumes.

However, BM Solutions said that the increased demand can be “seamlessly” met by an extended solicitor panel who “continues to provide top quality service”.

David Hollingworth, associate direct communications of L&C Mortgages, says that there are merits to both sides of the debate: “Removing barriers to customers who are remortgaging provides the right kind of incentives for customers, and encourages people to shop around by taking away those price hurdles. In that regard, free legals are a part of the furniture.”

But there are also downsides, he continues: “What you’ve got to balance out with those packages is that service can be variable. Some go straight through, whereas others might hit a bottleneck and customers get frustrated by what should be a relatively straightforward process.”

Richard Bousfield, managing director of The Surrey Mortgage Broker, thinks that the “bottleneck” issue can be easily fixed: “Free legal is a good incentive for clients. But the question isn’t about the offering being free—the service quality level is affected by the conveyancing companies taking on too much work. There are lots of conveyanceingcompanies out there, so maybe lenders should just be spreading out the work better.”

Hollingworth also notes that some lenders are responding to the potential issues with free legals by leaning towards the cashback option: “Some lenders give the customer a choice between free legal and cashbacks. Cashbacks can range from £250 to £500, but it gives the customer more options over who they can use, and hopefully that can bring back more control.”

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