 According to a conveyancing group, the Law Society’s latest announcement to try and ban referral fees, will not go ahead.
The group suggested that it is unlikely that the current system of paying referral fees to introducers of conveyancing work will happen.
This is because the expectations of consumers have moved on and a ban would leave conveyancing solicitors even more isolated and alone from potential clients, according to Steve Maine, managing director of the online conveyancing referral portal.
He stated:“It is a shame that the Law Society has seen fit to sabre rattle about banning referral fees, when clearly it should have consulted the many legal firms for whom referral fees are working and where, more importantly, there is no downside for the client, unless receiving a robust and cost effective service is now considered detrimental.
“Paying referral fees to business introducers is no different than paying for advertising. Regardless of the sensibilities of some Law Society members, the stark truth is that thankfully this side of legal representation is now subject to the same laws of supply and demand as any other service and while it might seem to have commoditised part of the profession, conveyancing has become slicker, cheaper and more representative of what consumers want, than was available in the past.”
More disaster within the sector
Conveyancers have urged the government to come forward and help the housing industry, before the financial downturn completely destroys the sector.
The National Association of Estate Agents (NAEA) has called upon Chancellor Alistair Darling, to further aid the housing market recovery and avoid sending Britain into a ‘W' shaped recession.
The NAEA has urged Mr Darling to improve access to finance for first time buyers , quickly extend the current stamp duty holiday, postpone Home Information Packs and encourage banks to lend again to help the mortgage market.
Peter Bolton King, chief executive of the NAEA, commented: “The NAEA calls on the Government actively to encourage lenders to provide high loan-to-value mortgages to enable first-time buyers to enter the market.
“We recognise that high loan-to-value mortgages carry additional risk for the lender, so we are calling on the Government to actively promote the use by lenders of Mortgage Indemnity Guarantees (MIGs) or Mortgage Insurance on properties with a high loan-to-value ratio. We also call on the Government to examine the viability of running a state-backed MIG scheme for lenders.
“The current Stamp Duty holiday, for properties up to £175,000, is due to cease at the end of this year. This, coupled with the reversion of VAT to its original rate of 17.5% - and possibly beyond in the future - threatens to cause damage to the fragile recovery we have so far seen in housing sales, just at the time when further stimulus is drastically needed.
“The lack of available mortgage finance is significantly hampering the supply of, and access to, mortgages. Despite considerable public pressure, banks continue to restrict access to mortgage finance and charge rates far higher than the current level of interest rates. A more interventionist solution is now required to force banks to lend again.”
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