Solicitor Removed from Your Lender’s Panel: What Happens to Your House Purchase?

Discovering that your solicitor has been removed from your mortgage lender’s panel can be unsettling, particularly when searches are complete, enquiries have been answered and your mortgage offer has arrived.

Do you need another solicitor? Can the work already completed be transferred? Will you have to pay another full conveyancing fee?

The answers depend on the lender’s position, the stage of your purchase and what a replacement firm can accept. The first step is to establish exactly what has changed and which arrangements the lender will permit.

Seven weeks into the purchase, a panel problem emerges

In an anonymous online account, a first-time buyer described being seven weeks into a purchase. Searches had been obtained, replies to enquiries received and a mortgage offer issued.

The buyer said their solicitor then explained that the firm could no longer act for their lender, Virgin Money. According to the account, the solicitor said the firm had recently been taken off the panel.

The buyer had understood that the transaction was progressing towards completion. They now faced questions about appointing another solicitor, transferring the existing work and paying additional fees.

The account does not establish why the firm lost panel membership, whether the lender allowed any alternative arrangement or how the purchase concluded. It does, however, illustrate why a change in panel status can become an immediate problem for a homebuyer.

What does lender panel removal mean for your purchase?

A mortgage lender’s conveyancing panel consists of firms it approves to act for it. In many purchases, the same conveyancing firm represents both the buyer and the lender.

Your solicitor’s ability to advise you and its authority to act for your mortgage lender are separate matters. If panel membership changes, the firm needs to establish whether it can continue acting for the lender on your particular transaction.

A mortgage offer does not, by itself, resolve that question. Ask for confirmation of the lender’s position before relying on an expected exchange or completion date.

Our guide to finding a solicitor on the Virgin Money conveyancing panel explains the checks to make when choosing a firm.

Was the solicitor removed, or never on the panel?

These are different situations. A firm may have been approved when you instructed it and subsequently lost that approval. Alternatively, it may never have been able to act for your chosen lender.

Ask the firm to explain:

• Whether it was approved for your lender when you instructed it.
• When its status changed and when it became aware of the change.
• Whether the change affects your transaction.
• What the lender has confirmed about continuing or transferring the matter.
• What action is being taken and when you can expect an answer.

Panel removal alone does not establish misconduct or negligence. Equally, a buyer needs a clear explanation of any change that affects the firm’s ability to complete the agreed work.

Can your existing solicitor finish the purchase?

Ask the firm to obtain the lender’s answer for your particular case. Do not assume that a pending application for reinstatement means the firm is authorised to continue.

Possible arrangements to investigate include permission for the existing firm to finish the transaction, appointing a replacement panel firm, or separate representation for the lender where the lender permits it.

These are questions to put to the lender, rather than options that are necessarily available in every case. If separate representation is proposed, establish who will act for whom, how the firms will coordinate and what additional charges apply.

If contracts have already been exchanged, tell everyone involved immediately. The panel issue needs urgent attention alongside the contractual completion deadline.

Will a replacement solicitor have to start from scratch?

A file transfer can give the replacement firm access to work already completed. However, that firm needs to review the material and decide what it can rely on when advising you and acting for the lender.

Ask for a coordinated handover covering:

• Contract papers, title documents and supporting deeds.
• Search results, including their dates and provider details.
• Enquiries raised and the replies received.
• The mortgage offer and relevant lender correspondence.
• Any report already provided to you.
• Outstanding issues, proposed dates and the position on exchange.
• Money held on account and the arrangements for dealing with it.

Existing searches may be usable, but do not assume that transferring copies guarantees acceptance. Ask the replacement firm to check their age, coverage, reliance arrangements and the lender’s requirements before ordering replacements.

The same applies to enquiries. Replies already obtained can be passed across, but the new solicitor may identify questions that still need answering.

Will changing solicitors cost more?

Do not assume that a replacement firm will honour the original firm’s quote. Obtain a written estimate explaining the cost of reviewing the transferred file, completing the remaining work and dealing with the mortgage lender.

Also ask the original firm for a breakdown of charges, money already spent and any refund or fee adjustment it proposes.

For SRA-regulated solicitors, the Code of Conduct requires understandable information about services and options, together with the best possible information about likely overall costs as the matter progresses. These requirements do not automatically determine who must pay additional costs in an individual dispute.

Keep the immediate arrangements for progressing the purchase separate from any complaint about the original service. Record the additional charges and the explanations you receive.

Do you have to change mortgage lender?

A panel problem does not automatically mean that you need a different mortgage.

Before considering a new application, ask your broker and lender whether the existing mortgage can proceed with another approved conveyancer and what changes to the legal instructions are required.

Changing lender may involve different eligibility checks, rates, fees and timescales. In the anonymous account, the buyer explained that obtaining the existing offer had already involved particular difficulties. That made checking the solicitor arrangements especially important.

Choose a replacement who can take over the existing file

Panel membership is an essential starting point, but it is not the only question. A replacement firm also needs capacity to review the existing work and progress the purchase.

Before instructing it, confirm:

• Its authority to act for the lender and the relevant office.
• Who will handle your file and when the initial review will begin.
• What documents it needs from the original firm.
• Which existing searches and other material it expects to accept, subject to review.
• Its charges, exclusions and likely additional expenses.
• Whether the proposed timetable is realistic.

Our related article considers the wider consequences when a buyer’s solicitor cannot act for the mortgage lender, including the effect on the seller and property chain.

Panel removal affects more than the law firm

The buyer experiences the disruption directly, but the consequences can extend to the broker, seller and other transactions in the chain.

Our earlier article on the shared impact of lender panel removal on conveyancers and mortgage brokers explores those wider effects.

For conveyancing firms, our guide to managing lender panel membership risk considers panel records, supervision and responding to lender enquiries.

For the buyer, the immediate priority is a confirmed route forward: who can act, what work can be reused, what remains outstanding and what the revised cost and timetable will be.

This article concerns purchases in England and Wales. The opening example summarises an anonymous buyer’s account; it is not a finding about the conduct of any firm or lender.