PROPERTY centres, the one-stop property shops run by Scottish solicitors, are to be investigated by the Monopolies and Mergers Commission.
But the Law Society of Scotland has come out in support of the lawyers, saying their centres dominate the marketplace because the solicitors are good at their jobs.
Announcing the investigation last week, director general of fair trading John Bridgeman said that since the 1960s Scottish solicitors had increasingly advertised properties collectively in property centres, from which non-solicitor agencies were excluded.
“Independent research has shown the dominant presence in a given locality of a centre which excludes advertising by or on behalf of estate agents can lead to solicitors who use the centre charging higher fees for estate agency and conveyancing services,” he said.
He added that the centres accounted for 46 per cent of the residential estate agency market in Scotland.
He stressed he did not want to see the “demise” of the centres, but was concerned the “terms on which the centres are operated limit consumer choice…stifle competition from non-solicitor estate agents and could hinder the development and growth of independent conveyancers”.
But Scottish Law Society president Alan Boyd said he could see no justification for the MMC investigation, especially in the light of an earlier hearing in the restrictive practices court which had cleared the property centres.
He said of the investigation: “We have been invited to comment and we think that these property centres provide a very valuable service. They are the only means by which the house-buying and house-selling public have a one-stop service.”
The MMC has nine months to complete its investigation and to report to the Secretary of State for Trade and Industry.
The majority of compensation claims paid out for poor conveyancing work result from solicitors' failure to carry out routine conveyancing procedures or to follow procedures to protect the interests of lender-clients, according to the Council of Mortgage Lenders. CML research showed about a quarter of claims arose from conveyancers failing to report to lender-clients the existence of “back-to-back” claims and one in seven claims involved problems with Land Registry applications or searches.