Monday, 24 February 2014

HSBC's £100 billion Reversal: Time Proves Sensibility of Panel Change of Heart

HSBC shocked the conveyancing industry in 2012 by requiring mortgage borrowers to instruct one of just 43 firms it named on its approved panel of solicitors. Five months later, complaints from customers and lawyers forced the lender to ditch the controversial plan.

Two years on, that reversal is seen as a win for consumers and probably contributed to the bank's grabbing a 12% share of the UK mortgage market.

Following the change of heart in August 2012, HSBC allowed all members of the Law Society's Conveyancing Quality Scheme (CQS) to act for it and the borrower in the legal work needed to buy a property, increasing the number of firms that consumers can choose from by more than 2,500 lawyers.

Later today the City expects HSBC to declare profits of £14.8billion, built on the back of the booming housing market, exceeding the profits made before the credit crunch. According to asset manager Investec, HSBC increased its share of new mortgage lending, having lent £100 billion to UK  borrowers. In 2007 it had just a 2.5 per cent share. Last August HSBC said it had approved £7.1billion of new mortgages to 68,000 customers in the first six months of the year.

This begs the question as to how just 43 firms could have dealt with that many conveyancing transactions? 

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