Solicitors holding house deposit funds - secure?

Pugster

Hi all,

I've searched and couldn't find a definitive answer.

Tomorrow the mortgage company is transferring £190,000 to our solicitors. This is for a house purchase that we plan to exchange next Friday with to complete in two weeks.

Our solicitor is a trustworthy business, and had been operating for many years. But is this money protected? What is the solicitor goes bust? I have nothing in writing (that I know of) that protects us. Clearly this is more than the £85k protected under normal regulation.

I'm sure this happens every day for house buying. But this is making me a little nervous!

stator

Your solicitor must hold client's funds in a separate account so that even if they went bankrupt the client's wouldn't lose their money.

marksoton

Pugster wrote: »

Tomorrow the mortgage company is transferring £190,000 to our solicitors. This is for a house purchase that we plan to exchange next Friday with to complete in two weeks.

That's very generous of your mortgage lender. As they'll now charge you a few extra weeks interest!

[Deleted User]

Why are the mortgage company transferring funds so long before completion?

PasturesNew

It's perfectly safe. It's as safe (safer than) most other pots of money.
It has to be.
This is how the system works.
You've used a proper company, they'll have insurance covering you if they disappear .... you're safe.

In any case, there are no alternatives for 99.99% of people.

Pugster

Thanks all - appreciate it!

Yes I guess that's the way it works. It's just a lot of funds to be sloshing around at a solicitors, with not much of an audit trail.

Fair point about mortgage being transferred early. Not ideal, but this sale is pretty time critical. If we don't hit the deadlines for exchange / complete it could all go pear shaped.

Arklight

Pugster wrote: »

Hi all,

I've searched and couldn't find a definitive answer.

Tomorrow the mortgage company is transferring £190,000 to our solicitors. This is for a house purchase that we plan to exchange next Friday with to complete in two weeks.

Our solicitor is a trustworthy business, and had been operating for many years. But is this money protected? What is the solicitor goes bust? I have nothing in writing (that I know of) that protects us. Clearly this is more than the £85k protected under normal regulation.

I'm sure this happens every day for house buying. But this is making me a little nervous!

Welcome to the giant leap of faith that is buying a property in the United Kingdom. Dodgy solicitors have been known to do a bunk with all their clients money.

Pugster

Arklight wrote: »

Welcome to the giant leap of faith that is buying a property in the United Kingdom. Dodgy solicitors have been known to do a bunk with all their clients money.

Cheers - that makes me feel much better about things! :beer:

davidmcn

Pugster wrote: »

It's just a lot of funds to be sloshing around at a solicitors, with not much of an audit trail.

?

How much of a trail do you want? The lender has a record of where they sent the money (and will have verified that the bank details really are the solicitors' client account and not the secretary's holiday fund). Solicitors' client accounts are about as well-regulated as they can be (strict rules to follow, liable to random audits by the authorities etc). The solicitors need to account to you for what's happened to the money. It's all pretty safe.

I'm sure we can come up with more likely disaster scenarios for you to worry about if you prefer!

HappyMJ

Pugster wrote: »

Hi all,

I've searched and couldn't find a definitive answer.

Tomorrow the mortgage company is transferring £190,000 to our solicitors. This is for a house purchase that we plan to exchange next Friday with to complete in two weeks.

Our solicitor is a trustworthy business, and had been operating for many years. But is this money protected? What is the solicitor goes bust? I have nothing in writing (that I know of) that protects us. Clearly this is more than the £85k protected under normal regulation.

I'm sure this happens every day for house buying. But this is making me a little nervous!

I'd want to know why they're transferring it tomorrow when they should be transferring it on the morning you complete. You haven't even exchanged contracts yet.

You'll have to pay interest on the mortgage from tomorrow.

Pugster

HappyMJ wrote: »

I'd want to know why they're transferring it tomorrow when they should be transferring it on the morning you complete. You haven't even exchanged contracts yet.

You'll have to pay interest on the mortgage from tomorrow.

Yes that is a pretty good point. It is early and will cost. We did have to redeem an existing mortgage with our current provider to get this mortgage, so I don't know if that's why they did it early.

It's not very money saving I know, but I'm not too concerned with the interest. There is a good chance the chain would collapse if we don't exchange next week. This will cost us much more than the interest on the mortgage.

Cheers all for your super fast responses. I really do appreciate it. (p.s you know where I'll be posting when the solicitor runs off with the cash!)