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Wednesday, 9 April 2014

Unfair for brokers to blame ‘slowlicitors’ - Broker Conveyancing


Mortgage Solutions | 08 Apr 2014 | 12:04
Harpal Singh
I've never really been interested in playing ‘the blame game' when it comes to determining who might be responsible for delays in the property purchasing process.
Ultimately there is generally a combination of factors that all go to contribute towards the timescale for exchange and completion being lengthier than we would like. However, this doesn't appear to stop some in the industry attempting to lay the blame at the door of, quite frankly, anyone who isn't them.
Last week I came across the word ‘slowlicitors' being used to describe a view of the conveyancing profession. It was being put out there by a group of estate agents to describe their view of conveyancing solicitors who they believe are holding up property transactions because of a perceived lack of resource which is adversely impacting on the whole process.
In effect, in this world view solicitors have not got to grips with the increase in property transactions since the middle of last year, have failed to bring in enough staff to cope with this greater workload, and therefore clients (and no doubt estate agents) are suffering as a result.
While I don't whole-heartedly subscribe to this view I do believe that many of the smaller conveyancing solicitors are struggling with the new environment and having cut their cloth accordingly when the bottom fell out of the property market five/six years ago they have not been willing or able to add resource in order to deal with any uptick. My own view is that the bigger conveyancing operators are however coping and have put in place structures, process and recruitment drives in order to solve their own resource issues.
I think therefore it is somewhat unfair to put the blame for delayed transaction times squarely at the door of conveyancing solicitors. There are of course resource issues across the board - valuers, surveyors, perhaps even advisers are in shorter supply than they were pre-credit crunch by a large amount and there were always going to be issues when the market eventually picked up.
That pick-up can probably be traced back to the middle of last year and I have some sympathy with firms taking a view in 2013 that they were going to see if this improvement was a temporary blip or something with legs. Thankfully, it appears to be the latter and therefore I see no reason why firms are not looking to up their resources if their business levels have improved and their process times have lengthened.
The big question for brokers recommending conveyancing firms of course is whether they have the knowledge about which firms are suffering resource issues and which are not. 
The last thing you want is a client going off to use a family solicitor that has one conveyancing specialist who just so happen to be on holiday at the moment with no-one else able to work on the case. Brokers need to use fully resourced solicitors otherwise they run the risk of being next in line to be blamed should the case not proceed as intended.
Harpal Singh is managing director of Broker Conveyancing

Tuesday, 1 April 2014

FCA promises tough action as it takes control of consumer credit

The Financial Conduct Authority has taken control of the consumer credit industry from today promising tough rules for short-term high-cost credit firms and debt management companies.
Martin Wheatley
In its 2014 risk outlook, published yesterday, the regulator said its plans to enforce a price cap on payday loans may affect some firms' appetite to remain in the sector if profits are damaged.
Speaking on Radio 5 live this morning, chief executive Martin Wheatley said: "Our processes will probably force about a quarter of the firms out of the industry and that's a good thing as those are the ones that have poor practices."
The £200bn-a-year sector, previously the responsibility of the Office of Fair Trading, contains approximately 50,000 firms.
These include credit card issuers, payday-loan companies, pawnbrokers,log book lenders, peer-to-peer lenders, and debt management and secured loan providers and brokers.
Any firm now offering some form of consumer credit will now be subject to the FCA's consumer protection rules and Principles for Business.
Payday loan and debt management firms will be the see the biggest changes to the way they operate.
The new rules include limiting the amount of times a payday loan can be rolled over to the next month to two and providing consumers with information on how to obtain free debt advice. 
Secured loan brokers and lenders are not expected to feel any major changes until the EU Mortgage Directive rules are passed into UK law at which time they are expected to be merged with first charge mortgages.
But Buster Tolfree, commercial director at Central Trust, said secured loan firms should act now to ensure they are lending responsibly.
"In the medium-term MMR-style affordability models will ensure all lenders follow a responsible approach to affordability over the term rather than simply relying on out-of-date, debt-to-income ratios," he said.