The government should review conveyancing fees if its plan to speed up the homebuying process is to work, the Chartered Institute for Legal Executives has said.
The Ministry of Housing, Communities and Local Government believes hundreds of thousands of first-time buyers will save on average £710, plus time and energy, with reforms such as upfront information, binding contracts and comparable information on estate agents and conveyancers.
However, CILEX says focus should be on the quality of work, not speed. Responding to the ministry’s consultation, the chartered institute said conveyancing work is not hugely profitable, so conveyancers accept higher volumes of cases, which in turn causes stress for everyone.
‘CILEX believes that a review into the current fee structures for conveyancing work will enable firms to make decisions to not over-commit to extremely high caseloads and ensure that the consumer is receiving the client care that they deserve. One method to achieve this is to implement an hourly rate structure, as opposed to a fixed fee structure. Alternatively, a blanket increase in conveyancing fees to reflect a higher profit margin (in line with CPI) could also achieve this,’ its response says.
CILEX, which canvassed members to inform its consultation response, also called for an imminent review on referral fees.
‘CILEX is aware that under the National Trading Standards, estate agents are required to uphold their duty of transparency in relation to referral fees to the consumer. Unfortunately, CILEX is informed that there are many agents not adhering to this in practice, placing the consumer at risk,' its response said.
The process for validating source of funds should shift from the conveyancer to the mortgage broker or lender, CILEX added, as they engage with the buyer first.
‘CILEX is informed that in a very high-stress and fast-paced environment, validating AML is a heavily burdensome administrative task for conveyancing lawyers. CILEX believes that discharging this function will allow conveyancing lawyers to meet client needs and also relieve significant pressures on workload, ultimately meaning smoother and faster transactions,’ the response said.
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