Majority of brokers experience problems with free legals: AMI

More than eight out of 10 brokers have condemned the service standards provided by the “free” legal firms offered by lenders.

The survey, by the Association of Mortgage Intermediaries, said 82 per cent of brokers found service standards worse than those provided by solicitors and conveyancers who had been appointed by the customer.

More than half (52 per cent) of brokers described these standards as “significantly worse.”

Seven out of 10 brokers (71 per cent) said they had experienced delays with these free legal services.

Respondents complained about difficulties getting through on the phone, paperwork being lost, completion dates being missed and the problem of not having one legal adviser overseeing a case. 

The AMI has now called for lenders to “reconsider free legal offerings”. It says it will be contacting their lender trade body to raise issues of conflict of interest and poor service standards.

One respondent to the survey said: “Lenders are aware that the service is abysmal but they still continue using these firms and this is reprehensible.”

As a result, many brokers are reluctant to recommend these services. A total of 73 per cent would only recommend free legals on a remortgage, with just 19 per cent recommending these services for both purchases and remortgages.

Almost one in 10 brokers (8 per cent) do not recommend these services at all.

Most brokers (57 per cent) said they would prefer lenders to offer cashback options instead.

In total three quarters of brokers said they did not think that lenders, or builders, should offer these services as there was a too great a conflict of interest.

AMI chief executive Robert Sinclair says: “This survey raises a number of questions on the effectiveness of these free legal services that are offered to many consumers.

“It is clear that the significant majority of brokers would prefer a cashback option where lenders feel that they wish to incentivise aspects of their products.”



Product transfer murkiness hides true market size: AMI

Product transfer murkiness hides the true size of the mortgage market, which could be the biggest since 2007, according to the Association of Mortgage Intermediaries. Lenders do not have to report product transfer figures to the Bank of England or Financial Conduct Authority. As a result, the true total size of the residential mortgage market […]


Exclusive: New AMI chair appointed

SimplyBiz Mortgages chief executive Martin Reynolds has been elected as the new chair of the Association of Mortgage Intermediaries. The decision was made this afternoon – 22 February – following an election process among board members. Reynolds was joint deputy chair along with TMA’s David Copland while former London and Country director Pat Bunton was […]


Free legals delays in spotlight again

The issue of ‘free legals’ has come under the spotlight again following complaints by one broker against Conveyancing Direct Property Lawyers. The legal firm owned by Skipton Building Society is used by a number of lenders that offer ‘free legals’ to consumers. Mortgage brokers Davidson Downing contacted Mortgage Strategy after experiencing “atrocious” delays with the […]


New opportunities for brokers in limited company BTL

Around a third of brokers’ buy-to-let business will to come from limited company clients in the next few years. This prediction was made by Mortgages for Business chief executive David Whittaker, who said there was “considerable opportunity” for brokers in this sector, despite a shrinking buy-to-let market. The company’s own research suggests that the buy-to-let […]

Dividend slump? Not if you look globally

By George Boyd-Bowman, Manager of the Neptune Global Income Fund Recent research has indicated that global dividend growth will slump by as much as 50 per cent in 2016. As collapsing commodities hit high-profile dividend payers, George Boyd-Bowman explains why the US and Japan are his top picks for income growth in 2016. Click here […]


News and expert analysis straight to your inbox

Sign up