Thursday 13th July 2017
"Walk down any High Street and you will find a firm of solicitors offering conveyancing services. However, the vast majority of these will have little or no experience of affordable housing schemes.
Although it has been around for many years, it is only recently that shared ownership has become more prevalent. Likewise in recent years various equity loan and discount purchase price schemes have been introduced. However, affordable housing is still only a comparatively small proportion of the overall housing sector and most solicitors still see affordable housing conveyancing as more complex than “ordinary” conveyancing.
In fact those solicitors aren’t wrong, affordable housing conveyancing is more complicated!
- Shared ownership leases contain many provisions that you won’t find in other leases, mortgages have to be approved by the Housing Association and lenders have more detailed requirements.
- Equity Loan schemes have complex procedures and require the solicitor to liaise with the Help to Buy Agent as well as the Developer / Housing Association and their solicitors.
- Discount Purchase price schemes are not acceptable to many lenders and are not well understood even by those who do lend on them, so require careful handling, yet are so new that very few solicitors will have dealt with them before
As your regular High Street solicitor is not familiar with affordable housing products, they will usually charge more for the conveyancing and generally take longer when dealing with such cases.
There are even some mortgage lenders who only have a limited number of firms on their panel who they trust to act for them on shared ownership cases. Firms of solicitors who don’t specialise in affordable housing may therefore find that they are unable to act for the lender and the buyer would in these circumstances end up paying two sets of legal fees – their own solicitors fees for the conveyancing and their lender’s legal fees too.
Housing Associations and developers therefore have panels of solicitors that they recommend who specialise in affordable housing. Using one of these firms means that you will be looked after by an expert, who will most likely charge less and generally proceed quicker than if you used a conventional High Street solicitor and who is guaranteed to be on the lender’s conveyancing panel for affordable housing.
Many buyers are distrustful of using a firm of solicitors who have been recommended by the seller, fearing that they won’t be sufficiently independent. Although this is a natural concern, buyers should understand that they solicitor is duty bound to act in their best interests in the transaction and is acting for them and not the seller. However, because affordable housing is a relatively small sector, solicitors who specialise in it are likely to have a good working relationship with the Housing Association or Developer, their solicitors and the specialist mortgage advisors who will also have been recommended - in our experience, this works in the buyer’s favour rather than the other way round.
With a new build property in particular, often only one or two firms of solicitors are recommended. The legal paperwork for a new build property is voluminous and takes several hours to read, however the legal paperwork tends to be similar for all plots and it is therefore more efficient for a solicitor to act for multiple buyers on a development. Using a solicitor who is already familiar with a particular development therefore means that the buyer is more likely to achieve the exchange deadline imposed by the Housing Association or Developer.
Rather than being a “con”, there are very good reasons why you should use the recommended solicitor, and doing so will most likely save you time and money and make your home purchase journey a much smoother one."