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Estate agents are warning borrowers off HSBC, says Law Society

Estate agents have started to advise mortgage borrowers against using HSBC because of its recent decision to cut its conveyancing panel to just 42 firms, says The Law Society.

The lender made the decision in January and although customers are free to choose their own solicitor, HSBC will still use a panel firm for its own legal work, which will increase costs for consumers and could lead to delays, if they choose their own firm.

In a letter to its members today, Desmond Hudson, chief executive of The Law Society, says delays are emerging for mortgage applicants using HSBC.

He says: “The society understands that a number of estate agents are beginning to associate HSBC mortgage customers with delays to the process, which threaten what are already delicate property chains.

“We are aware that some estate agents are advising caution to consumers who are considering an HSBC mortgage.”

It says many of its members are highlighting to their clients the potential additional costs and delays associated with HSBC’s current panel and that as a result some clients are opting to go to another lender.

The Law Society says it is making headway with its campaign to alert borrowers of the detrimental effect HSBC’s decision is having, with many of its members lobbying politicians and consumer groups.

It says it has been contacted by a number of MPs, as well as Edwina Hart, the minister for business, enterprise, technology and science, in the Welsh government.

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  • Rob Hailstone 20th March 2012 at 3:25 pm

    If you aren’t happy with HSBC’s new rules sign the H M Government e petition: http://epetitions.direct.gov.uk/petitions/29948

  • Tom Cleary 20th March 2012 at 12:43 pm

    This decision by HSBC has absolutely nothing to do with fraud. It is about control for them. Yet another example of SME’s getting squeezed by the Corporates. I wish the Law Society the very best in taking this stance against them and sticking up for their members…

  • Grey Haired Underwriter 20th March 2012 at 10:08 am

    I can understand why HSBC wanted to limited their solicitors panel not least because, evidentially, the legal profession have been heavily involved in mortgage fraud and this together with the deregulation of legal services is creating concern (interesting how de-regulation causes problems!!). What I find strange however is the small number of firms on the panel of a national lender. I suspect they must have more than one firm for each large city but surely that means that a minimum of 50% of their panel are not readily accessible to anyone who does not live in those large cities- and it certainly must exclude some major conurbations. I have considered the geography and it seems ludicrous that some counties of this country quite possibly have no HSBC representation.

    I am bound to say that their behaviour is awfully restrictive especially when bearing in mind that the Conveyancing Quality Scheme has been set up by the SRA to ensure that lawyers are properly vetted.

    I’m sorry but I do wonder if there needs to be some questioning of HSBC’s motivations for this action

  • Sarah 20th March 2012 at 6:04 am

    I am currently going through an application with HSBC UK, the agents suggested that we use their solicitors as HSBC’s apparently took too long. We had to change our solicitors 3 times as they were instructed and then found not to be on HSBC’s panel. Because of this HSBC were confused as to who was acting for us and therefore where to send the offer to (even though they were informed twice) i receved our offer 3 weeks ago and i live in Dubai (post takes about a week from the UK), my solicitors in the UK are still waiting for their copy and all i keep being told by HSBC is there are back logs due to the stamp duty changes!

  • Des Platt 19th March 2012 at 5:16 pm

    A client of mine had similar experience to John Lacy’s with First Direct and it was a gilt edged case too

  • John Lacy 19th March 2012 at 4:58 pm

    I fear that the HSBC solicitor panel is much more efficient than HSBC’s mortgage processing.
    My nephew is an HSBC customer of long standing so when he needed a low priced remortgage with no early redemption penalty it was logical to let him go to the bank.
    It took them 5 months to get a £38000 mortgage transferred from the Abbey. The solicitor only took 2 weeks to transfer the mortgage after the offer came out so the 18 weeks it took to produce the offer was the delay.

  • Jon Hinton 19th March 2012 at 4:21 pm

    I had a client who needed to move very quickly due to their purchaser needing to complete prior to the First Time Buyer Stamp Duty amnesty deadline. HSBC couldn’t offer them an appointment for at least three weeks, the mortgage I arranged was offered in twelve days and they exchanged contracts in just twenty days. Clearly HSBC do not believe in offering service standards to match their pricing!

  • Des Platt 19th March 2012 at 4:15 pm

    They also turn so many down too. I’ve had plenty of refugees back from HSBC. They really must waste a lot of their own time turning down cases

  • mazzie 19th March 2012 at 4:07 pm

    Let’s be honest here, estate agents are warning borrowers off HSBC because they have the best rates around hands down and they don’t take broker business!

  • W R Brookes 19th March 2012 at 3:49 pm

    As an agent with several branches, I can assure the Law Society that we are certainly not giving our many buyers any such advice.
    The conveyancers we use are on the HSBC panel, deliver an excellent service, are available to clients much more readily and for longer hours than many solicitors and, in short, do what it says on the tin.
    As regards price, solicitors who low ball on fees rarely have the resources to deliver an effective customer service.
    It seems likely that, in the current market, forward thinking agents would be more likely to prioritise an available mortgage over a non-panel conveyancer from the obliging lender.

  • Richard Scott 19th March 2012 at 3:48 pm

    Good for them I say. A recently referred first time buyer ended up going with them as they felt they had little choice due to additional costs and the disproportionatley generous mortgage products they were offered. I did at least 5 hours work for them meeting, sourcing mortgages and insurance solutions etc for HSBC to ring fence the lot on the back of their solicitor’s fee policy.

  • Richard Scott 19th March 2012 at 3:47 pm

    Good for them I say. A recently referred first time buyer ended up going with them as they felt they had little choice due to additional costs and the disproportionatley generous mortgage products they were offered. I did at least 5 hours work for them meeting, sourcing mortgages and insurance solutions etc for HSBC to ring fence the lot on the back of their solicitor’s fee policy.

  • James Lindon-Travers 19th March 2012 at 3:42 pm

    Perhaps they can also warn buyers off lenders that are unashamedly dual pricing, as well!!!

  • Ancient Wisdom...is a mortgage broker in N3 19th March 2012 at 3:42 pm

    Customers are driven by price with mortgages usually.

    HSBC advertisee the lowest rates and therefore customers dont want to listen to a broker if HSBC offer better deals.

    What can we do? NOTHING