LSL Property Services has been forced to set aside £17.3m to cover legal claims against its valuation services, resulting in a pre-tax loss of £7.9m for the first half of the year.
In its interim results, published this week, the property services group says it set the money aside after lenders filed claims from between 2004 and 2008 that LSL believed to be dormant.
The provision has resulted in LSL’s pre-tax profits falling from £6.5m in the first six months of last year to a pre-tax loss of £7.9m in the first half of this year.
LSL non-executive chairman Roger Matthews says: “This is a disappointing development and reflects a deterioration in claims experience resulting from certain lenders using solicitors on a ‘no win, no fee’ basis and pursuing claims we previously considered dormant.”
LSL expects the provision to impact the business over the next three years, but says this will be offset partly by the disposal of freehold properties currently held on its balance sheet, which it expects to raise around £9m after tax over the next two years.
London & Country associate director of communications David Hollingworth says: “Lenders will continue to pursue claims against valuations. I think we will see more of this happening.”