MortgagesAug 9 2016

Conveyancing Association pledges to sort out delays

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Conveyancing Association pledges to sort out delays

The Conveyancing Association is preparing a white paper aimed at improving what several brokers have described as the link in the mortgage transaction chain most prone to delays.

Last week, a variety of industry participants sounded off about the application to completion process which they said takes too long, frustrating them and their clients.

Several cited conveyancers - many of which were accused of being understaffed and lacking in IT infrastructure - as one of the biggest obstacles in getting a mortgage processed quickly.

Beth Rudolf, director of delivery at the Conveyancing Association, has pushed back, saying the organisation was working on a report - due in October - to bring together stakeholders in the industry to improve things.

The Department for Business, Innovation and Skills was looking at a call for evidence around this issue, but it got delayed by Brexit, she added.

“The brokers are right, one of the biggest issues is that law firms simply do not charge enough to resource the transactions,” stated Ms Rudolf.

“This is for a variety of reasons, but mainly the rapid increase in obligations on the conveyancers over the years, along with pressures to keep the pricing down and competition in the market place from introducers and comparison sites.”

Ms Rudolf explained conveyancers now have to deal with multiple searches, stay the right side of with anti-money laundering regulations, be the gatekeeper for the stamp duty regime and keep up to date with increasing communication demands from the chain.

“The difficulty is that prices have not increased, even though there is a lack of supply due to so many conveyancers leaving in the recession.”

Stuart Gregory, managing director of Hampshire-based Lentune Mortgage Consultancy, said the supply and demand issue has been exacerbated this year, swinging the market back to lengthy delays.

“Staff levels dropped following the recession and many have been holding off recruiting ever since due to yo-yo markets, which means while some firms are forward thinking, others are traditional and slow,” he commented.

Complaints came thick and fast during the first quarter this year, as buy-to-let landlords rushed to get deals done before the stamp duty tax increase increase for second homes came in on 1 April.

At the time, Fleet Mortgages’ chief executive Bob Young said while lenders were able to offer in a matter of weeks, it was the time taken by the conveyancer to work through cases that is going to determine whether transactions completed before the cut-off.

Ms Rudolf pointed out her organisation’s members are often hamstrung by ambiguous lender instructions, which result in so many referrals into the mortgage centres that conveyancers have to hold for up to 90 minutes to get through on the phone to chase up a query.

“The Conveyancing Association has had some really positive dialogue with lenders who are keen to reduce delays created by queries and work with conveyancers and valuers to nip queries in the bud,” she said, adding they have also produced a standardised referral form to ease the delivery of information.

“Simply acknowledging the request for mortgage funds and confirming that they will be available for completion would reduce calls into the lender by at least 50,000 call per month.

“Sadly, many lenders do not have the IT development resources to implement this most basic of changes, so we are working with the intermediaries to work on ways to deliver the communication outside of lenders’ systems.”

Adrian Anderson, director of brokers Anderson Harris, pointed out you often get what you pay for in life and this can certainly be true with property lawyers.

“We have found some solicitor firms to be very old-fashioned, they will often not want to communicate with the mortgage broker or client on the phone and if they do they may only take calls at certain times of the day,” he said.

“The fee quotes we have seen from solicitors can vary widely. Out-of-town solicitors can sometimes quote very low fees and as a result may only want to do the bare minimum and may not be quick if there are any complications.”

peter.walker@ft.com