MPs have launched an inquiry on improving the home buying and selling process in England.
The Levelling Up, Housing and Communities (LUHC) Committee announced yesterday that it would embark on a cross-party inquiry examining the property transaction process, the information available to buyers, and the role of conveyancers and estate agents.
It will take written evidence as well as hosting live sessions with industry professionals and government ministers, looking at:
- How efficient or effective is the existing process for buying and selling homes? How could this be improved?
- How could the consumer experience be improved during the process for buying and selling homes?
- Is the reliance on voluntary initiatives adequate to improve the buying and selling process, or should improvements be made mandatory through legislation?
The Transaction Process:
- What is the impact of issues in the transaction process, such as gazumping or gazundering, and how could they be remedied?
- Would greater use of reservation agreements improve the transaction process?
- What prevents reservation agreements being more widely used? Why has a short, standardised reservation agreement not been developed, as promised by the then Government in 2018?
Information Provision:
- Do buyers have the right information available at the right time during transactions?
- What effect would it have on the transaction process if sellers were required to provided set information about a property when it was marketed?
- How much data associated with housing transactions still needs to be digitised and how can the digitisation process be accelerated or prioritised?
- What challenges are there to digitisation or providing information at listing?
Conveyancers:
- Do consumers have sufficient information to determine which conveyancer to use? How could information provision on conveyancing be improved?
- What effect would a mandatory professional qualification for estate agents have?
- Should there be a single, legally enforceable Code of Practice for property agents?
- What impact does the practice of referral fees have, and how would a review, standardisation of practice, or ban affect transactions and consumers?
Clive Betts, chair of the Levelling Up, Housing and Communities Committee, said: “The process of buying and selling a home in England is often stressful for those involved. Indeed, despite there being around two million households who successfully buy or sell their home each year, consumers often find the process is not as efficient, effective, or as consumer-friendly as it could be.
“As part of this inquiry, we will look at the chief obstacles to improving the process of buying and selling a home. We will be keen to examine issues such as the time taken to complete a transaction and challenges in finding the right information. Topics such as a lack of transparency around conveyancing services, the payment of ‘referral fees’, and the weak regulation of estate agents will also be on our agenda in this inquiry.”
Evidence sessions for this short inquiry are likely to begin in late April 2024.
The closing date for submissions is Thursday 18 April ahead of an expected evidence session in April.
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Overpricing is the biggest culprit (in a long list) in slowing transactions.
Rightmove’s house price index and data contributed more to overpricing than anything else, allowing valuers to overvalue.
Long sole agency contracts are the next biggest culprit.
If it’s overpriced it won’t sell, this makes no difference to transaction times.
Valuers don’t use Rightmove house price index, they look for 3 sold completed sales.
I agree sole agency contracts should be capped at 12 weeks.
Overpricing, hmmmm, i think you need to speak to Joe Public and tell them, ha ha. How many thousands of times have i been asked by the seller, "can we try a bit more". It will always remain a stressful process, as it should, this is likely to be your most expensive ever purchase.
I agree completely. And the endless media and industry messaging that house prices are going up and won’t fall is what feeds some of this misplaced seller expectation.
All you have to do is look at the auction process. All requirements are listed at the beginning so there are no ifs and buts. In my experience ( 40 years) it’s usually the solicitors covering their own interests that delays the process. The lenders put pressure on them so naturally if the have their feet to the flames they will proceed with caution.
Once an offer is accepted then there should be a financial commitment and this would stop most of the shenanigans.
Been here, done that. In the auction process the sellers pay for a pack, sellers pack.
…they didn’t work.
Ahh yes it's overpricing that's the culprit... because estate agents have only started to "overvalue" properties in the last 5-6 years right? lol.
Transaction times have increased from 4-6 week to 6 months thanks to a work from home epidemic and conveyancing practitioners who don't employ actual solicitors but instead young workers on low pay to shuffle paper around a desk, whilst taking on more work than they can cope with on too low fees with no incentive to exchange.
And there is one of these types of conveyancing conveyer-belt practices in almost every single chain.
Same could be leveled at the banks too.
And this absolutely adds to the woeful transaction time, AFTER a deal has been agreed. But the time to sale, if you include all the agents a seller lists with before they finally get real on price, is causing real friction and blockage to the overall liquidity in the market. If people priced their homes more realistically they would reach “sale agreed” sooner. That’s my point. And I know this is more a problem of seller expectation than anything else, but this is made worse by the worst deliberate overvaluers.
Bit of a larf that the Government is looking into efficiency ! should be looking closer to home
It should be a legal requirement the draft contract has to be issued within 48 hours of an accepted offer.
No offer can be submitted without a solicitor in place.
That’s it.
A one-size-fits-all should be established which includes mandatory pre-sales marketing set-up procedures involving solicitors/conveyancers (already existing within the auction process) and legally imposed maximum completion timescales not exceeding for example 16 weeks. It must become illegal to be involved in. gazundering or gazumping once an offer has been made and formally accepted supported by a simple pre-contract agreement. Included in this agreement there needs to be a percentage financial penalty should a buyer or seller then fail to complete, legally enforceable once signed by both parties. A financial advisor has to justify his recommendations to protect himself and his client concerning recommended insurance products, like-wise Estate agents should be made to provide acceptable comparable evidence to substantiate any agreed marketing price. If comparables are not available a statement concerning the agreed marketing price should be provided to the seller and kept on file substantiating the agreed marketing price. Any failure to comply with such should then be deemed to be gross professional mis-conduct! Only a system that envokes clarity and professionalism, backed by the government and the professional Agents themselves will be effective. It is not a matter of training Estate Agents to do the right thing for their clients and the industry it is a matter of mutual respect between all professional parties, a clear understanding of timescales and what needs to be done and a process that does not allow buyers and sellers to blackmail each other or the chains that they are involved.
Agreed Jason.
The INITIAL problems can be solved very quickly:
a) Proper due diligence is carried out by the agent as to any offer. I.e. full proper chain check, an AIP produced, evidence of funds and perhaps even a £500.00 reservation agreement (they do this on new build why not non new build). Too many chains are not receiving the benefit of a proper check. Too many times do I hear an agent say 'I didn't know about that mortgage offer' 'I didn't know there was another property in the chain'
b) The solicitor/conveyancer for the seller is instructed at the point of marketing - Identification, money on account, client care paperwork and protocol forms are done then not after an offer is accepted
c) The vendor instructs their solicitor/conveyancer at the point of marketing to check the deeds for errors
d) A buyer should only be allowed to offer if they have a Solicitor engaged
The conveyancing process is another topic for another day that requires overhaul. Simply getting from agreed offer to contract issued should be the first port of call. Too many chains take 3-4 weeks to get to that when it should be taking less than 1 week.
Pricing for me is relatively subjective. People want to hold out for the most they can get, people want to sell quickly and will reduce and a house is only worth what someone is willing to pay for it. I'm not sure what can be done about that.
80% of our sales have Reservation Agreements in them - The UK is one of the last countries in the world not to make them law.
All buyers should instruct sols and get AIP before viewing.
All sellers should instruct sols and get contract pack ready before marketing commences. The contract pack should be so full that hardly any enquiries are raised.
The issue here is cost. The sellers pacK, HIP, didn’t work due to £400 to put a house on the market. However, to prepare a draft contract is pennies & something an agent could be involved with.
I feel we have a Government doomed to failure, doomed to fail in its next involvement with anything to do with property sales, having failed in many disastrous ways with Building Safety legislation introduced several years ago.
Dropped the ball completely with leasehold and freehold reform.
Introduced a reform of Land Charges falling seriously behind.
So let's start speaking about something else that's never going to happen for the length of time this present government and Ministers are going to be around.
It is a total waste of time, effort and the electorate's taxes.
All of the above plus the fact that we now have so many [Self Interest] Groups all chasing around and offering grandiose solutions. The latest of these is another Public Body with absolutely no experience in Property Law. The British Standards Institute has already joined in the malaise.
I suppose it beats Nero, who just played the fiddle whilst Rome did its burning. I trust it gives ministers something to do while awaiting the election. The activity itself will slide to a halt.
Months before a General election the government decides to look at buying and selling process - what a joke. By the time all the evidence has been given a Labour Government will be running the country, so why waste all the stakeholders time asking for input.
Second, this Government always goes back on its word or fails to execute policy, example Disco Gove the Housing Secretary lead an 'inquiry' into leasehold in the UK, and said it would be reformed ... in a fanfare of publicity - then very quietly last week all reform was dropped as the government realised that changing the leasehold system would overnight make the investments made by landlords worthless, wiping out hundreds of millions of returns for pension funds, you could not make it up.
There are hundreds of thousands of flats and newbuilds with cladding issues, and only 40% of remediation work has been 'started' on those lucky enough to be earmarked for being made safe. National homebuilders made multi-million profits building houses not fit or safe to live in, and the duped buyers just sit andwait wondering how their surveyor, conveyancer and lender all of whom should have safeguarded them in the buying process - failed to do so. Even more alarming they just sit now as prisoners in property assets that can not be sold or even re-mortgaged.
Like the Post Office fiasco, big problems are swept under the carpet by succesive governments until ... a tv programme tells the nation what is going on ... and still the government acts slowly and no doubt covers up what it really knew and when.
Paula Vennells the ex-CEO should be in court herself to 'prove her innocence' given she knew what was going on and actually sanctioned a terrible dishonest strategy, so she got her salary, pension etc, allowing post masters she knew were innocent to go to prison, commit suicide and have their livelihoods cut from them.
A government with power and authority would cut through this and act, and many times the government ministers were told by post masters what was going on ... but chose to turn a blind eye.
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