A small London-based mortgage company is pioneering free title insurance for its customers in a move that will herald less work and lower fees for conveyancing solicitors.

Under the scheme, Kensington Mortgage Company, which works with about 5,000 new borrowers each year, will offer clients free title insurance for mortgages or remortgages on properties up to a value of £150,000.

The policy will cover local authority searches – negating the need for solicitors to conduct them – as well as common title defects such as those relating to restrictive covenants. However, the policy will not cover buyers if their properties are already involved in court proceedings.

Kensington Mortgage Company chief executive Chris French said it was preparing to write to English and Welsh solicitors to inform them of the scheme and invite them to alter their fees accordingly.

He said he thought solicitors whose clients went to Kensington would be obliged to lower their fees because they would not have to undertake such detailed searches. He added that this meant they could enjoy a higher turnover of work.

But Mervyn Rundle, a conveyancing solicitor at Rundle Walker who sits on the Law Society standards and guidance committee, said many in the profession would fear Kensington's plans.

“I think many solicitors will feel this is taking away work and they will be unhappy about it,” he said.

But rundle suggested this view may based on a general misunderstanding of title insurance, which was generally seen by solicitors as a threat rather than an opportunity.

Kensington's move is the latest of a series of initiatives to use title insurance in the UK.

First American Title Insurance, which in the past five years has transformed Canada's traditional UK-style conveyancing system into one increasingly dominated by title insurance, is set to launch a fast-track conveyancing service based on title insurance in the UK in the next three months.

First American company solicitor Phillip Oldcorn said Kensington was offering a “bolt on” title insurance system instead of completely revamping the house-buying process.