The deal, offered at an ultra-competitive price and designed primarily as an alternative to free legals, was originally launched last August for an initial trial period. Following the completion of the trial the decision has now been made to offer the deal on an ongoing basis.
The price of the ‘Rapid Remortgage’ has been cut from £120 to £116 plus VAT – a decision made to counter the recent increase to a 20% VAT rate. Advisers can choose to add their own referral fee to this basic price; the new price means that advisers can offer their clients the ‘Rapid Remortgage’ product at a cost of £199.20 including VAT and receive a £50 referral fee.
Where lenders are providing legal cashback offers of £200 this would then cover the full amount. If the cashback on offer is £250, the adviser can receive a £92 referral fee; if the cashback is £300, the adviser can earn £134.
The ‘Rapid Remortgage’ deal offers a seven-day completion period with regular updates and control for the adviser, plus the solicitors act for the clients, which is not the case with free legal offerings where the solicitor is only acting on behalf the lender. Conveyancing Alliance believe the majority of remortgages are completed with free legals and have questioned whether this treats customers fairly given the poor value and the lack of client representation.
The continuation of the deal follows the publication of Conveyancing Alliance figures for quarter four 2010 which revealed an ongoing increase in remortgage instructions up 10% from the previous quarter.
Harpal Singh, managing director of Conveyancing Alliance Ltd, commented: “We have seen a good take-up of the ‘Rapid Remortgage’ product since its launch last year, and with the improvement we are seeing in the overall remortgage market, it makes sound business sense to continue offering this product to our adviser customers.
“We are still of the opinion however that many advisers are still too quick to recommend the free legal offerings from lenders even with the much-discussed negatives of such a decision. Our remortgage product puts the control back in the adviser’s hands and offers them a further income-generating opportunity plus, with the level of cashback now on offer from lenders, choosing the ‘Rapid Remortgage’ means the cost is covered anyway.
“While free legals may seem like the easy option, that doesn’t make it the right one, and advisers who continue to recommend these offerings need to fully consider if they are providing their clients with best advice. It is pleasing to see the remortgage market stirring from its slumber over the past few months and we are hopeful that this improvement will continue. While it does, and while there is demand for this product, we will continue to offer it to market.”
