A homebuyer instructed a solicitor, paid £500 on account and started the conveyancing process. Only afterwards did they discover that the firm was not on the proposed mortgage lender’s conveyancing panel.
The buyer then faced an unenviable choice. They could change solicitor and potentially lose some of the money already paid, wait to see whether the existing firm could join the panel, proceed with separate legal representation or change to a mortgage deal that they estimated would cost an additional £1,200 over five years.
The figures come from an account published by a buyer several years ago and should not be treated as typical current costs. However, the underlying problem remains highly relevant. Checking lender panel status after instructing a conveyancer can expose a buyer to avoidable cost, delay and uncertainty.
Check before you instruct
Select your proposed mortgage lender and search by postcode or town before paying money on account to a conveyancer.
Search for a conveyancer by lender and location
Search results provide a selection of relevant firms and are not the lender’s complete official panel list. Confirm the firm’s current status before instructing it.
Why does the solicitor need to be on the lender’s panel?
In a typical mortgaged purchase, the conveyancer acts for both the buyer and the mortgage lender. The buyer needs advice about the property and transaction. The lender needs the conveyancer to investigate its security, follow its instructions and provide the required certificate of title before mortgage funds are released.
A lender will ordinarily allow a firm to represent it only if that firm satisfies its panel criteria. Regulation by the Solicitors Regulation Authority or the Council for Licensed Conveyancers does not automatically place a firm on every mortgage lender’s panel.
A conveyancing firm may act for borrowers using one lender but not another. The relevant question is therefore not simply whether the firm undertakes conveyancing. It is whether the firm can act for the particular lender involved in that transaction.
Why is this sometimes discovered after the solicitor has been instructed?
Buyers are frequently encouraged to instruct a conveyancer as soon as an offer is accepted. At that stage, the mortgage lender may not have been selected or the application may still be under discussion with a broker.
A buyer may consequently appoint a solicitor before knowing which lender will provide the mortgage. Alternatively, the buyer may assume that a well established conveyancing firm will appear on every major lender’s panel.
Neither assumption is safe. Panel requirements vary between lenders and panel status can change. A firm that acted on an earlier purchase or remortgage may not necessarily be able to act for a new lender today.
If the buyer changes mortgage lender during the transaction, panel status should be checked again. Acceptance by the original lender does not establish acceptance by the replacement lender.
What can happen when the firm is not on the panel?
The available options depend on the lender, the firm and how far the transaction has progressed.
Change conveyancer
The buyer may instruct a different firm that can act for both the buyer and the lender. This may be the most practical solution when the problem is identified early, but it can involve duplicated work, another identification process and additional costs.
The original firm may already have incurred fees or paid for searches and other disbursements. Whether any money is refundable will depend on the retainer, the work completed and the arrangements for transferring the file.
Use separate representation
In some circumstances, the buyer may retain their chosen solicitor while the lender instructs a different panel firm to act for it.
This can mean two firms reviewing aspects of the same transaction, communicating with each other and satisfying separate reporting requirements. The buyer may be required to meet the lender’s additional legal costs. Separate representation can therefore increase both expense and complexity.
It should not be assumed that every lender will accept this arrangement or that it can be organised without affecting the transaction timetable.
Ask the firm to apply for panel membership
The firm may be willing to apply to join the lender’s panel. That does not provide an immediate or guaranteed solution.
Each lender determines its own eligibility criteria and application procedure. The firm may not qualify, the lender may not be accepting applications or the process may take longer than the purchase allows.
A live transaction should not normally be planned on the assumption that a panel application will be accepted quickly.
Change mortgage lender
A buyer might consider moving to a lender whose panel includes the chosen solicitor. However, the alternative mortgage could carry a different interest rate, arrangement fee, valuation requirement or lending decision.
Changing lender may also require a fresh application and valuation. It would rarely make sense to change a favourable mortgage solely to preserve the appointment of a particular conveyancer without first comparing the total financial and practical consequences.
Who should check panel status?
A buyer should not assume that the estate agent, mortgage broker, lender or conveyancer has completed the check on their behalf.
Before paying money on account, the buyer should:
- identify the intended mortgage lender;
- ask the conveyancing firm whether it can act for that lender;
- obtain confirmation that applies to the particular office or legal entity being instructed;
- search independently by lender and location;
- retain the written confirmation; and
- check again if the lender changes.
The question should be specific. Asking whether a firm undertakes work for a bank is not necessarily the same as confirming that it can act for that bank in the proposed transaction.
Our practical guide explains in more detail how to check whether a solicitor is on a lender’s panel and why it matters.
Does a panel search provide a guarantee?
An online search is a valuable preliminary check, but it should not be treated as a substitute for confirmation from the conveyancer and, where necessary, the lender.
Panel arrangements may distinguish between different offices, branches or legal entities using similar names. Some lenders may also operate different arrangements for residential mortgages, buy to let lending or particular types of transaction.
LenderMonitor allows a borrower to start with the lender and search by postcode or town. Its results show a selection of firms working with the relevant lender’s instructions rather than reproducing the lender’s complete official panel. The search should therefore be used to identify and investigate suitable firms, followed by direct confirmation before instruction.
Panel membership is not permanent
Mortgage lenders keep their panels under review. Firms may have to provide updated information, satisfy continuing eligibility requirements and comply with the lender’s instructions.
Our article on why lender panel membership should not be treated as permanent examines the issue from the perspective of conveyancing firms.
Historic panel criteria also show why a general assumption is unsafe. An earlier article recorded how building societies published their own solicitor panel requirements. That article reflects the position discussed in 2013 and should not be relied upon as a statement of any lender’s current requirements.
The best time to check is before paying
A panel problem discovered immediately may be inconvenient. The same problem discovered after searches have been ordered, enquiries raised and a completion timetable discussed can be considerably more expensive.
The important sequence is straightforward:
- Identify the likely mortgage lender.
- Check which conveyancers appear in the relevant lender and location search.
- Ask the selected firm to confirm its current panel status in writing.
- Only then decide whether to instruct the firm and pay money on account.
If the mortgage lender has not yet been selected, tell the conveyancer. Once the lender is known, confirm panel status before substantial work and expenditure accumulate.
Do not discover the panel problem after paying your solicitor
Start with your proposed lender, enter your postcode or town and identify firms to investigate before you instruct.
Always confirm current panel status directly before paying money or relying on the search result.
This article provides general information only and does not constitute legal, mortgage or financial advice. Panel membership and lender requirements can change. Buyers should confirm the current position with their proposed conveyancer and mortgage lender before proceeding.