Remortgaging - End of free legals?

All is not well in the land of panel management according to my friends at Nationwide Building Society. So hacked off are they with the constant complaints from punters aggrieved at the time it is taking for the legal eagles - (let's be real para legals) to get remortgages over the line that they have decided to take their ball away and remove free legals as a carrot to remortgage. I guess they think that as the remortgage legal market is dominated by a few firms and with the likely hood of a huge surge in punter's coming to the end of their 2 year fixed rate deals, the embattled solicitors who are barely able to cope now will have no chance when the volumes start to ratchet up.

I understand that the standards have taken a tumble down south and as a result Nationwide have taken this stance which will affect the whole of the UK. Not good for the Scottish consumer who have been served reasonably well by half a dozen or so firms over the years.

I can see two consequences

More expense

There will be the additional cost. Yes you will get a cashback of £500 or so but that ain't going to cover the whole cost. One of the great benefits of going with a free legals package was that you had no costs. It will surprise you how costly the outlays in a remortgage can be. The reason that the panel solicitors could do it so cheaply was that they had agreements with the lenders as to what they had to do and no doubt had a whole raft of indemnity insurance in place so they did not have to get costly reports. Your own solicitor is not going to have that leeway so will undoubtedly have to purchase all the reports. You will need to pay for them and the other outlays at a potential cost in excess of £250. You are going to struggle to get a solicitor to do the legals for less than £400 + VAT. Total cost circa £700 odd.

It will take longer!

Many solicitors are not geared up for remortgage work and have just left it to the Dirty Half Dozen to plough the remortgage furrow. The result will be that solicitors will shy away from accepting the work. It is not lucrative and can be time consuming. For many firms there will always be something shinier to get their fee earning mits on and your remortgage may well sit languishing on the corner of a solicitor's - (let's be real para legal's) desk. A constant barrage of phone calls may move your transaction forward but me thinks that the removal of free legals is just going to lengthen the process not shorten it!

The concern is that Nationwide Building Society may be the first of many to walk away from the "free legals" market. If that starts to happen you may see some of the Dirty Half Dozen begin to squeal as much as the poor old Scottish consumer.