Buyer’s Solicitor Not on the Lender’s Panel: Can the Sale Still Proceed?

A seller had been waiting for more than 11 weeks after accepting an offer. Their own onward purchase was approaching exchange, but the buyer still did not have a mortgage offer because the buyer’s solicitor was not on the proposed lender’s conveyancing panel.

The solicitor had reportedly applied to join the panel, but the seller had no clear timetable and no certainty that the application would succeed. With the onward purchase exposed, the seller began considering whether to put the property back on the market.

This anonymised example demonstrates why lender panel membership is not merely an issue between a buyer, their solicitor and the mortgage lender. One missed check can delay a mortgage offer and place every transaction in the property chain at risk.

How can a lender panel problem delay the mortgage offer?

A conveyancer acting on a mortgaged purchase commonly represents both the buyer and the mortgage lender. The lender relies on the conveyancer to investigate the title, comply with its instructions and provide the required certificate of title before mortgage funds are released.

If the firm is not accepted by the particular lender, it may be unable to undertake the lender’s work. The position must then be resolved before the transaction can proceed normally.

The buyer may need to change conveyancer, arrange separate representation or wait while the existing firm applies for panel membership. Each option can introduce additional work, cost and delay.

A mortgage application can be progressing financially while the legal representation problem remains unresolved. That distinction may not become apparent to the seller until the expected mortgage offer or exchange date fails to materialise.

Can the sale still proceed?

Potentially, yes. The problem does not automatically mean that the transaction must fail. The buyer may be able to change to a panel firm, the lender may permit separate representation or the existing solicitor may ultimately be admitted to the panel.

The important questions are whether the proposed solution is acceptable to the lender and whether it can be implemented within the transaction timetable.

A seller should not assume that a panel application will succeed simply because it has been submitted. Equally, the seller should not assume that the buyer must abandon the purchase. What matters is obtaining a clear explanation of the proposed route and a realistic timetable.

Why does the whole property chain become exposed?

A property chain depends on several linked transactions reaching exchange and completion on compatible dates. A difficulty in one purchase can prevent every connected party from moving.

If the buyer at the bottom or middle of the chain cannot obtain a mortgage offer because the legal representation arrangements have not been accepted, the consequences may include:

• the seller being unable to exchange on an onward purchase;
• mortgage offers or valuations elsewhere in the chain approaching expiry;
• additional rent, mortgage interest or storage expenses;
• buyers and sellers losing confidence in the proposed timetable;
• another party deciding to remarket their property; and
• the eventual collapse of one or more connected transactions.

These consequences do not mean that every panel difficulty will destroy a chain. They do explain why panel status should be checked before significant expenditure and reliance accumulate.

Why not simply wait for the solicitor to join the panel?

Panel admission is not an administrative formality that every firm can complete immediately. Each lender sets its own eligibility requirements and application process.

The lender may consider matters such as the firm’s structure, regulatory history, professional indemnity insurance, transaction volumes, accreditation and risk controls. The lender may not be accepting applications, or the firm may not meet its criteria.

Even where an application is possible, the buyer should not assume that it will be considered within the timetable of a live purchase. An application can be delayed, require further information or be declined.

The fact that a conveyancer appears on numerous other lender panels does not answer whether it can act for the lender selected by this particular buyer.

Would changing solicitor be faster?

Changing to a firm that can act for the lender may be more practical, particularly if the problem is discovered early. However, the buyer may have to complete new identification and client onboarding procedures. The new firm will need to review the contract papers, searches, enquiries and any work already undertaken.

The buyer may also have to pay for work completed by the original solicitor. Searches and other documents may sometimes be transferred, but that depends on the circumstances and whether the new firm is prepared to rely on them.

Changing solicitor is therefore not necessarily painless, but waiting indefinitely for panel admission may create an even greater risk to the transaction.

Can the lender appoint a separate solicitor?

Some lenders may permit separate representation. The buyer retains their chosen solicitor while a panel firm acts only for the lender.

This can prevent the buyer from having to replace their original solicitor completely, but it introduces another firm into the transaction. The two conveyancers may need to exchange documents, respond to questions and coordinate the lender’s requirements.

The buyer may also be responsible for the lender’s additional legal costs. Separate representation should not be assumed to be available or appropriate without checking the particular lender’s position.

What can a seller reasonably ask?

The seller will not usually be entitled to confidential information about the buyer’s mortgage application. Nevertheless, where progress has stalled, the seller can ask through the estate agent or conveyancer whether:

• the buyer has submitted a complete mortgage application;
• a valuation has taken place;
• the buyer’s conveyancer can act for the proposed lender;
• any panel application or separate representation arrangement is outstanding;
• there is a realistic timetable for resolving the problem; and
• the buyer remains able and committed to proceed.

A seller should be cautious about relying on an optimistic exchange date where a mortgage offer has not been issued and the lender’s legal representation remains unresolved.

The seller should obtain advice from their own conveyancer and estate agent before imposing a deadline or remarketing. The appropriate response will depend on the chain, the buyer’s progress and the seller’s onward commitments.

What should buyers do before instructing a conveyancer?

The safest sequence is to identify the intended mortgage lender before selecting the conveyancer. The buyer can then search for firms associated with that lender and location.

LenderPanel.com provides a UK directory through which users can search by lender and location. It covers more than 130 UK lender panels and provides a selection of relevant regulated firms.

Before paying money on account, the buyer should still ask the chosen firm to confirm in writing that it can act for the particular lender and transaction. If the mortgage lender changes, the check should be repeated.

Our earlier guide explains how to check whether a solicitor is on a lender’s panel and why the question matters.

Panel membership can change

Past experience with a firm does not guarantee that it can act on a new mortgage. Panel membership is lender specific and may change over time.

A firm may leave a panel, be removed, fail to satisfy updated requirements or decide that maintaining membership is no longer commercially appropriate. A lender may also revise its eligibility criteria.

Our article on the changing lender panel environment explains why membership should not be treated as permanent.

The differing approaches taken by building societies are not new. A historical article recorded how individual building societies published their own panel admission requirements. That article reflects the position discussed in 2013 and is not a statement of any lender’s present criteria.

A buyer’s panel mistake can become the seller’s problem

The seller in this example did not select the buyer’s solicitor or mortgage lender. Nevertheless, the resulting delay threatened the seller’s onward purchase and left the entire chain without a reliable timetable.

That is why panel checking should form part of the earliest stages of a mortgaged transaction. Buyers can protect themselves against duplicated costs and delay. Sellers and estate agents can ask sensible questions before allowing weeks to pass on the assumption that the mortgage and legal arrangements are progressing together.

A check taking a few minutes at the beginning may prevent a problem that later affects several households.

This article provides general information only and does not constitute legal, mortgage or financial advice. Panel membership and lender requirements can change. Buyers and sellers should obtain advice concerning their particular transaction.