Cash House Purchase Protection

GDonbavand

Hello
I am buying a house for a large amount using the proceeds from the sale of my current house and significant savings. The solicitors have said they need the money about 2 or 3 days before we exchange. I asked if there is any protection as my concern is that if the solicitor's bank goes bust while they have the money I could lose it. The solicitors did not seem to know if there was any protection. They said they had insurance but I was not convinced they knew it would cover this. Could anyone please give me any help or explain how to get round this problem? The solicitors account is with NatWest. Many Thanks,
Graham

dimbo61

http://www.sra.org.uk/accounts-rules/


Think this explains that your money is safe in a separate solicitors account.
Are you paying the 10% deposit first ?

davidmcn

The FSCS advice is here - they protect deposits in client accounts.

GDonbavand

Thanks for your replies, I had read the SRA guidance but to me that is more to do with protection from theft or misappropriation by the solicitor rather than failure of the bank the funds are deposited with.

I have since found the Law Society website with a section called "Deposit protection for client accounts" (unhelpfully I am apparently not allowed to provide a link) - section 3.2 says "the FSCS protects the first £85,000 deposited, with an authorised deposit-taking institution, on behalf of a client" which seems to confirm my fears that if the bank the funds are with goes under with all the money for my house in I could lose a great deal.

ReadingTim

GDonbavand wrote: »

which seems to confirm my fears that if the bank the funds are with goes under with all the money for my house in I could lose a great deal.

And how likely is it that the solicitors' bank "goes under"?!?

The answer is that it's very unlikely that this will happen, but if you'd like something to worry about then consider that it's just as likely that your bank "goes under", therefore the best idea would be to hide all the money under your mattress....

GDonbavand

I know the chance of a problem is extremely small, the difference is at the moment my savings are spread across accounts in amounts <85k whereas once I move the money to the solicitor it will all be together hence the problem. I thought there may be an obvious answer to this given it must occur quite often but maybe people just have to take the risk...

G_M

The solution (also a moneysaving ploy!) is to bi-pass the solicitor altogether.

Do the conveyancing yourself. At Exchange of Contracts you can then pay the 10% deposit yourself, from one or more of your bank accounts, each of which holds no more than £85K (unless you have a joint account).