Anti-money laundering requirements for ‘source of wealth’ checks are consuming up to 25% of conveyancing lawyers’ time, according to Peter Ambrose, owner of The Partnership and Legalito, who has identified this as a primary cause of property transaction delays.
The checks, which differ from simpler ‘source of funds’ verification, require lawyers to scrutinise financial documentation from third parties who contribute to property purchases, including parents, relatives or other benefactors. Documentation can include bank statements, share certificates, wills, lawyers’ letters and ISA statements.
Client onboarding delays
Ambrose noted that the average conveyancing transaction takes 14 weeks to complete, with client onboarding alone requiring seven days on average. This initial phase involves collecting identification documents, form completion and securing funds on account, despite being fully electronic.
The extended transaction period provides multiple opportunities for clients to change properties, lenders or withdraw from purchases entirely. These property fall-throughs add further complexity to the conveyancing process.
Industry collaboration proposed
Ambrose suggested that estate agents and lawyers could reduce transaction times by informing buyers at the outset about the documentation requirements for third-party contributors. He argued this would allow parties to prepare necessary paperwork in advance rather than scrambling to compile it before exchange.
The comments come as the government has announced plans to reintroduce Home Information Packs when parliamentary time allows, citing lack of property information as a key problem. However, Ambrose disputed this assessment, stating that searches and missing certificates rank low among actual causes of delays.
Most conveyancing panel work operates on a no-sale, no-fee basis, meaning lawyers do not receive payment if transactions fail to complete. This contradicts common assumptions about legal fees in property transactions.
Market context
The conveyancing sector faces ongoing pressure to reduce transaction times whilst maintaining compliance with anti-money laundering regulations. The tension between regulatory requirements and transaction speed continues to affect the broader property market, where delays can impact both buyers and sellers.
Ambrose’s firm specialises in conveyancing services and software delivery. His analysis suggests that whilst regulatory compliance remains necessary, better coordination between industry stakeholders could mitigate some of the associated delays without compromising legal standards.
