There’s a fee hike coming shortly for key conveyancing documents at HM Land Registry, and it may take some of the market, not least consumers, by surprise.
On the 9th of December, the charges for all HM Land Registry documents will be doubling and, in some cases, tripling, albeit from a low base, as part of a funding drive to help digitise HM Land Registry. This Herculean task has been long-awaited by the industry and is a welcome move, as it forms an important piece of the housing transaction puzzle for those looking to speed up the pace of UK housing transactions.
However, the fee hikes themselves, as a percentage of the previous costs, are substantial.
In a few examples, bankruptcy searches are rising from £2 to £6; a search for a registered title represents a hike from £3 to £7 for the digital version or £11 for paper; and the fee for a copy of a historical title is rising from £3 to £7.
The impact on the average conveyancing bill for buying or selling a property may not be significant in percentage terms. But on average, the increases are likely to add roughly £20 to each packaged remortgage conveyancing deal (commonly known as ‘fixed price remortgage deals’). Now, £20 may not sound like much, but for the conveyancing industry, which has evolved in recent years to shave costs and compete with the slimmest of margins, a £20 increase puts the average £250 packaged remortgage fee model under strain.
Protecting the Client
So what now? There are still a few weeks to go, but it’s important to understand how your conveyancing partners and support services plan to deal with the upcoming changes.
Many legal firms are still considering their options and are in ‘watch and wait’ mode to see who moves first. Some may decide to absorb the extra fees or cut the broker fee to maintain a competitive edge. Others may pass the fees on to consumers, but as few have re-priced yet, it’s too early to predict the majority approach.
The fixed price remortgage conveyancing market is well-known for its clear pricing models, which are built into many lender and broker marketing plans. Simply raising fees to absorb the price rises will upend a long-established business model, and many firms may be forced to consider this route.
Clear, Fair, and Not Misleading
As a broker, you’ll know that certainty over costs in any agreed deal is critical. Consumer Duty obliges you to be ‘clear, fair, and not misleading’ in your dealings with clients.
Full disclosure of all prices and fees, providing the ‘true cost of a deal,’ supports your credentials as a trustworthy and transparent professional, offering clarity around the services you provide. With the market still deciding how to react to the changes, it’s difficult to guarantee the figures you are offering your clients right now.
If your client is in the middle of a transaction, they may have a conveyancing quote that was accurate at the time but could change by the point of completion, either before or after the 9th of December. In some cases, customers will have paid some of the initial title search fees but may face a new price tariff if they complete after the December deadline. Clients never want to be surprised after the fact with a bigger bill than expected.
Make sure you’ve spoken to your conveyancing panel manager or legal services partnerships to get certainty on their strategic thinking, if not the final plan. Even the smallest cost hikes to the broker or conveyancer fee will impact the firm’s revenue balance sheet by the end of the financial year.
Both your current and future clients need to be able to plan ahead and have certainty around the final cost of their housing transaction. You can’t afford not to know where both you and your clients stand on this, so start the conversation today.
Harpal Singh is CEO at conveybuddy