Abbey has announced to 7,000 of its local solicitors today that it will no longer let them handle the banks side of the conveyancing process for house buyers.

The Law Society is currently in talks with Abbey, but describes their actions a “grave”.

The decision means that people planning on buying houses will have to pay the cost of an extra set of solicitors who will look after the lenders interest.

The decision to get rid of the solicitors service was unexpected, but the bank is claiming that the solicitors have not done enough work over the last 12 months.

‘Revoked with Immediate Effect’

In a letter to one of its solicitors firms in Fleetwood, Lancashire, Abbey wrote: “given the low volume of transactions dealt with by your firm during the past 12 months, I regret to inform you that your panel appointment has been revoked with immediate effect.”

Solicitors on the approved panel previously would have acted on behalf of the buyer taking out a mortgage, and would be relied upon by the lender to look after the lenders interests.

Their responsibilities also include ensuring money is passed on to the seller/ seller’s solicitor, and making sure the bank’s mortgage is registered as a charge on the property at the Land Registry.

The change means that when a buyer chooses a solicitor that is not on Abbey’s panel, Abbey will insist that another firm is involved to look after the banks paperwork, meaning that twice the cost has to be covered by the borrower. This could add up to an extra £250 in legal costs for the borrower.

‘Grave Importance’

Abbey is one of the UK’s leading mortgage lenders, and therefore the Law Society is trying to change its mind back. The Law Society’s president, Paul Marsh has said that no-one – not the Council of Mortgage Lenders or the Building Society’s Association – was aware of Abbey’s decision before it was announced.

He said: “I want to assure all members of the grave importance that we attach to this matter and the actions of the Abbey National.”

A spokesman for Abbey has said: “We have written to a number of firms that have undertaken few or no transactions with us over the past year to advise them that we will be removing them from our panel.

“We have put in place a process to deal with requests for reinstatement and each request will be evaluated on its merits.”

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