House Buying Reforms

Like any good magic trick, it is all about getting your audience to focus away from what you are actually doing. Waiting in the wings has been the Government, who remain keen to wave their property magic wand, hoping that some sparks will fly and the public gives them some rapturous applause given that the property market and economy remain tough.

What are the new Housing Reforms?

In the latest package of Housing Reforms announced, you would be forgiven for thinking from the emblazoned headlines that the claimed overhaul of the property buying and selling process was the best thing since England won The World Cup. The key changes include up front sales packs, a wider shift to digital tools, a new code of conduct for estate agents and earlier binding agreements. With all of these combined, it is claimed it will save buyers and sellers four weeks in the conveyancing process and first time buyers £650. Many of those less experienced in the property industry have been quick to jump on the easy bandwagon, extolling the virtues of these whizzy new rules. However forgive me for not giving the Government a standing ovation just yet. As with magic, it is in the detail.

HIPS?

What so many seem to have forgotten is Home Information Packs (HIPS), which were met with consistent delays through 2007 and 2008. When they finally launched in 2009, they were scrapped just over one year later. The Government have now dressed these back up and wish to reintroduce them, even though they were undeniably a failure and defies all logic.

Conveyancing?

What the reforms have wildly overlooked is the conveyancing process itself. Having upfront information in the form of a reconstituted HIP sounds lovely, however it doesn’t actually solve much.

Through the years, the conveyancing process has got ever longer. I recall when 28 days was the standard, now we are talking about 3 to 4 months and that’s just to reach exchange. As such, this part of the property transaction is the hardest I have known in my 25 year career and is what your estate agency commission actually goes towards.

Changing of timescales

The problem is that every element of the property transaction has been dragged out. Local authorities and Land Registry are under pressure with staff cuts leading to delays from the outset, banks are reluctant to lend given the economic outlook which is somewhat ironic given that it is the actual Government who have created these problems, plus restrictions on lenders remain tough. So many conveyancers have gone down the mass volume route with less staff, which means transactions take longer and The Law Society continues to discuss change but nothing substantial implemented. The list goes on.

Easier first steps?

Even if a buyer has some upfront information, it is not their decision at this point that counts. It is the conveyancing process which involves solicitors, surveyors, lenders and insurers. If any of these parties don’t wish to support the buyer in their wishes to purchase, then the whole card trick will quickly fall apart. The focus of the Reforms on the first few steps may help a little, but they don’t even scratch the surface of the problem itself, which is the conveyancing process and its constituent parts which are the issue. Saving 4 weeks on an already lengthy process is somewhat minor. The proposed earlier binding agreements again sound nice but they only give a superficial reassurance – either side can still wriggle out of them.

The whole process remains highly protracted and risky, with the new reforms focussing in the wrong direction. Whilst the Government are hoping for a rabbit out the hat, it may just cut a few people in half.