SALE OF HOUSES AND LAND (LEGAL COSTS) (Hansard, 7 April 1964)

§ Mr. Robert Edwards (Bilston)

I beg to move. That leave be given to bring in a Bill to amend the law relating to the remunerations and fees of solicitors and others in the sale of houses and land in order to simplify the procedure and reduce the costs to buyers. The purpose of my proposed and modest Bill, which I hope the House will give me leave to introduce, is to deal with the very neglected field of consumer protection in connection with the cost of the sale of houses and land. It is a field of protection which is crying aloud for reform.

To give the House some idea of the nature of this problem, I should like to refer to a letter, which is one of many that I have received. This is from a young man, a scientist, 32 years of age, who had to change his job and move from Norwich to Loughborough. The cost involved in the sale of his house and the purchase of another one was £6,000. Legal fees amounted to £105 and agents' fees to £65. The conveyance of his house was delayed for four months because a solicitor made a mistake in the conveyancing of his first house. The result was that this man and his wife, apart from having to pay over £170 in conveyancing fees, were compelled to pay £30 in interest charges for four months on the two houses which they still owned through no fault of their own.

This explains in very simple terms the nature of the problem with which the House should deal. It is estimated that approximately 700,000 houses change ownership every year and, at a rough and ready estimate, the cost of conveyancing in respect of houses, land and property amounts to about £50 million a year. A group of Labour solicitors dealing with this problem worked out the cost in the London area of the sale and purchase of a house valued at approximately £5,000. Their estimates were as follows: conveyancing and other charges in connection with such a house, unregistered, amounted to £451; on a house priced at £5,000, registered, the cost was £360.

807 The details, briefly, are as follows: on the unregistered house £138 in estate agents commission; £10 in solicitors' scale fees for the redemption of the mortgage; solicitors' scale fees for the sale and for other legal expenses £68 and £6. The figures in respect of the regisstered house are £138, £7, £44 and £4. For the purchase of the house the figures are £68, £53, £53, £25, £4, £7, £13 and £6, making a total for sale and purchase of £451; and for the registered house £44, £35, £35, £25, £4, £7 and £17, making a total of £360.

It is true that the Law Society has queried these figures, but the figures were produced by the group of Labour solicitors to whom I have referred. If these figures are correct, as presumably they are—and, in any case, nobody can doubt that on a house valued at £4,000 the cost in legal fees alone is £160 every time the house changes ownership—there is something seriously wrong with the whole legal system relating to the purchase and sale of property.

The Government intend to abolish the whole principle of resale price maintenance. We are told that their purpose is to abolish legal sanctions which enable prices to be maintained at a high level, and to introduce into the resale trade a kind of Eastern bazaar of competition in order to force down prices and to reduce the cost of living. If this principle is correct in connection with the manufacture and sale of consumer goods, the same principle must be applied to this great legal structure that has been built over the years which gives the legal profession and other professional bodies legal sanctions to maintain exorbitantly high prices.

The time has surely arrived when some reforms should be introduced into this outmoded system of the conveyancing of land and houses. When a young couple purchase a house for the first time it represents the one major expenditure in the whole of their lives, and, apart from the responsibility of mortgaging arrange- 808 ments, they have to find at least £60 in cash for legal costs at the very time when cash is very short.

I am very pleased to learn that the Law Society has today issued a statement to the Press, in which, apparently, it proposes, if I may use the term, to put its own house in order. Of course, this House has always been reluctant to introduce legislation when a trade or profession or trade union is willing to re-organise its arrangements and eliminate obvious social injustices and restrictive practices. The purpose of this Bill, therefore, is merely to help the legal profession to do its own reforming. The Law Society states that it proposes to simplify the procedure of conveyancing land and houses, and to get rid of the mumbo-jumbo and black magic which plague and have plagued for many years this kind of purchase. The Law Society proposes to agitate for the compulsory registration of all land and property in order automatically to reduce the cost to purchasers. This is precisely what my Bill would propose to do. I therefore hope the House will give me leave to introduce it, because such a Measure is long overdue.