First details have emerged of the information vendors may have to provide up-front In future transactions if government house buying reforms are implemented - and they are nothing less than a revolution in how property details are prepared.
Beth Rudolf, a leading member of the industry-wide Home Buying and Selling Group, has revealed the information to a conveyancers’ conference called Bold Legal LIVE! held in conjunctions with the ESTAS Conveyancers’ Awards.
The Home Buying and Selling Group has existed for the past 18 months.
It includes agents, property lawyers, mortgage lenders and representatives of organisations including the NAEA, ARLA, HM Land Registry, the Law Society, The Property Ombudsman, Rightmove, the Society of Licensed Conveyancers, the Bold Legal Group and the Building Societies Association.
The government’s call for up-front information should be seen hand-in-hand with other reforms, including the introduction of reservation agreements; the government has made it clear that it wants the current 20-week average between a home being marketed and a buyer moving in, reduced to between six and eight weeks.
There have been no firm decisions yet by housing minister Esther McVey but the HBSG ideas are being fed into the Ministry for Housing Communities and Local Government and are considered highly influential in forming future reforms of the buying process.
Rudolf told conveyancers that the HBSG was seeking to create a system where there was “one source of truth” about a property - whether that came from the seller, estate agent, seller’s conveyancer or independent valuer.
The “truth” should be in the form of a document currently under the working title of a BASPI - Buying and Selling Property Information. This document would be:
- completed at the point of property marketing;
- accessible prior to any buyer making an offer;
- accessible to lenders who may be able to pre-authorise lending on a property;
- sent to all parties with the memorandum of sale; and
- reviewed by a valuer prior to valuation.
There would be 12 key areas of information which a seller or their representatives may be expected to complete prior to marketing:
- property to be sold;
- disputes and complaints;
- alterations and changes to property;
- notices which affect the property;
- specialist issues;
- fixtures and fittings;
- insurance;
- boundaries;
- right and informal arrangements;
- other issues affecting the property;
- additional information.
There would also be additional questions relating to leasehold properties.
As this information would be compiled prior to marketing, a summary of it would appear on property descriptions on agents’ websites and portals.
Rudolf told the conveyancers that work was still in progress on many of the details, and further research was being commissioned into parts of the BASPI document.
Rudolf and the Ministry of Housing Communities and Local Government have stressed that this is not yet policy, but the MHCLG’s lead officer on improving the house buying process - Matt Prior - says that when the Home Buying and Selling Group’s proposals have been finalised they will be considered by the MHCLG and be put to appropriate housing ministers for final decisions.
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All this would do would be extend the period between making a decision to go on the market. Unless these 12 pieces of information are accessible quicker it will make little difference to the time scale, just the point at which a property goes live. Surely it would be better to compel house sellers to seek this information as soon as the house goes on the market if it is time that you want to save? Then it can be marketed AND investigated simultaneously.
For an industry that hasnt changed it processes in nearly 150 years it may appear impossible but it really is simple.
In Birmingham we have introduced a major solution that will see transaction times reduce from 16 weeks to 10 weeks.
I think the bigger issue here is the number of non completions, up from 21% in 2016 to 38.8% in 2018..
Watch Birmingham over the next 12 months to see how things 'can' be changed.
However my BIGGEST fear is that of a reservation fee being introduced. By asking buyers to fork out 1%-2% of the purchase price will kill the first time buyer market, for those who struggle already to raise the initial 5% deposit.
Nothing new here, Home Information Packs were a success back in 2008. We completed the first one on behalf of probably the most well known group of Estate Agents. For 3 months it worked, then the Government, under pressure from the tabloids, binned the project. Probably ruined 100,000 people's lives on the way. I actually was involved from 1988 until the launch, various Ministers came and went. A little bit to hot for some to handle. no doubt they will again spend millions on research and come up with the same findings, it is a success in Canada. It does take the attention away from the post Brexit hysteria, when that actually happens.
Is this not HIP by another name. The gathering of information is not difficult - Auctioneers have been doing it for decades.
The lack of property available on the market will not take away from the fact when someone finds a buyer, they then have to find a property to purchase, which is the main delay and often the sale is ready to exchange for 6, 8 weeks and more before the purchase is even found.
I think up-front in this case means obtaining information before an offer has been accepted. There is no intention to delay marketing.
A major solution for Birmingham sounds great, but surely when chains extend beyond Birmingham, unless that solution is shared nationwide, delays will continue?
Hi Rob,
we are running a pilot here at the moment across the entire end to end solution of the transaction and yes it will soon be rolled out across the rest of the country as well.
Having been a member of the House Buying & Selling Group (HSBG) since it's inception, I can only reiterate that this proposal, alongside the reservation agreement trial, is a genuine attempt by the industry to find ways of improving the house buying and selling process. Unsurprisingly, since the HIPS debacle, Government are nervous about making wholesale changes to the industry, but they are supportive of the industry trying to find its' own solutions. There are no magic wands to reforming the process, but the HBSG brings together all sides of the industry to see where improvements can be made. And it is the likes of Rob Hailstone and Beth Rudolph who have worked incredibly hard to help those solutions evolve. No, it's not going to change everything overnight, but it's a step in the right direction.
Don't companies like Gazeal do this already?
Thanks, Sam. Yes - we were actually at the Bold Legal Live Event on Friday and I did politely raise my hand and remind everyone in the room including the Home Buying & Selling Group / Matt Prior / Beth Rudolph that Gazeal does indeed do everything already - on both gathering legal information up-front and the reservation agreement process.
Alongside Gazeal there are a few solutions out there which help speed up the process.
One thing 'we' cant fix though is people..
wise words like 'horse to water' and 'shepherding fog' come to mind but progress will happen and things will change as long as we all work together for the benefit of everyone
As Clive, says - auctioneers have been doing this for decades and with more documentation than is proposed. For registered land (which is 99% of transactions) most solicitors who know the drill can prepare a pack in a week to ten days without any problems. So no big deal - except conveyancers who have never dealt with auction procedure will have to go on a course to know what they are doing!
Was this part of the conference filmed so that it can be watched back?
Very disappointing that reservation agreements and upfront information seem to be hyped as some sort of cure for why the standards of conveyancing are so shockingly poor oput there So poor out there that it is almost a scandal for the public to even secure decent legal work. We all face the low quality conveyancing, the worst moment being when you call to exchange and you listen and feel so bad for their client at what possible quality they secured.
Frankly, I consider it a real failure to properly crutinise what are the key ingredients to making a conveyancing transaction fly through, and what are those which cause delay.
Instead rid us of the reasons for the current delays and you have your result.
- no offer can be accepted without a mortgage in principle. Full stop.
- no offer can be accepted without you revealing what timescale you can commit to (with a chain of those commitments passed along fro the buyer at the start)
- conveyancers currently need zero legal training. That is madness. We could badge the office cleaner as a conveyancer and set them to work. The Government need to step in and correct that scandal.
- the moment a leasehold offer is accepted, that same day (hence preparation of price and address) the LPE1 pack should be requested from a managing agent
- CML / the Protocol is not detailed enough to:
- save the public £00m’s a year with pointless legal insurance and avoid legal delay and:
- cap the time after which FENSA, GASAFE, NICEIC certifications are needed
- cap the time after which conveyancers need not secure covenant consent (seriously
which member is the public is going to come into your office and say ‘I know I watched a
conservatory / extension go up X years ago, but not I want to take action’
- cap the time after which lack of building control is purely a matter of survey (12 months,
as beyond that unless a surveyor says there is a continuing danger to health and safety
which is all the Council would do to enforce) it is a matter of survey)
- make all s.106 agreements not binding on plot owners
- ensure road adoption charges never fall to frontagers on a new build
- make it crystal clear not to send pro forma sheets with conservatory questionnaires or septic tank
questionnaires or overriding interests ones (yes firms still do)
- deposits must not come to solicitors by cheque, only same day bank transfer
- the exchanges formulas need to inbuild an undertaking on the conveyancer that they will take out
the indemnity policy supplied to the buyer during the conveyancing, doing it on completion at
their clients expense.
- do not leave raising enquiries until all the searches are back (yes there are some law firms that
still lose multiple weeks of potential conveyancing)
- the Protocol form TA7 is pointless and should be scrapped
- Protocol form TA6 is too brief and misses too many frequently asked questions
And again......the worst thing.....conveyancers currently need zero legal training. That is madness. We could badge the office cleaner as a conveyancer and set them to work. The Government need to step in and correct that scandal.
Tim, great post.
There is so much about improving the standards of estate agents requiring them to all be accredited yet it appears the legal system has gone backwards.
Having fewer properly qualified conveyancers would be far better for all concerned.
This happened in the IFA industry.
9O% of them gave up as they couldn't or weren't able to be qualified.
Same should happen with conveyancers etc
There are 2 skill sets required, the official training and knowledge coupled with the attitude to get the job done.
I have seen too many solicitors try and prove their worth by the transaction become a competition over the other side.
My work with solicitors is based around the deal already being done by buyer and vendor, let’s get to completion as fast and efficiently as we can.
Paul and Phil - you are both a breath of fresh air.
Great points 'fewer properly qualified conveyancers' and an 'attitude to get the job done'.
Conveyancers have to realise that clients are asking two things (1) "get me to exchange pronto...but (2) don't miss anything/make a legal mistake." The latter is my biggest fear for the public, as boasting about speed has to come with impresisve conveyancers behind it....impressive conveyancers are a rarity if we are all honest.
It is of course knowledgeable and properly qualified property professionals that are best able to provide the service the public want.
It is obvious to even an idiot that the public want qualified professionals to carry out what for the average Joe will be the most significant financial transaction they ever undertake.
Currently anyone can set up in the EA game.
Zero barriers to entry to an industry which deals in billions of pounds.
The temptation for fraud is massive.
The public want guaranteed; qualified and accredited Industry professionals.
That includes EA; LA and conveyancers etc.
I do not believe it is unreasonable for the public to expect that their probably most significant transaction is dealt with by qualified professionals.
If this means fewer industry participants then so be it it.
Those who make the effort to be qualified will naturally attract customers.
Who would now seek independent financial advice apart from a qualified whole of market IFA?
The industry needs far fewer participants.
There are simply too many UNQUALIFIED EA and LA etc.
Let the industry be subject to the same qualifying criteria as IFA's are.
That will get rid of the rogues and the deadwood leaving behind a cadre of motivated and competent qualified EA etc.
The public deserve nothing less!!
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