Given the level of resource and energy being put behind upping the number of first-time buyers in the UK, you might anticipate that there’s been an ongoing education process aimed at new purchasers, answering their questions about buying a home, who does what, their responsibilities, and all other manner of potentially confusing areas.
Judging by the government’s recent response to its own ‘Call for Evidence’ and its intended publication of both ‘How to Buy’ and ‘How to Sell’ guides, this has not really been top of the agenda, and recent survey results from a CA affiliate member, reallymoving.com, show that there is a significant gap in terms of first-time buyer knowledge.
Some ‘highlights’ of the survey of 500 first-time buyers include:
• 67% believe either their surveyor or estate agent carry out the conveyancing.
• 36% believe the survey is paid for by the seller or lender.
• 25% believe stamp duty is paid for by the sellers.
• 60% said they were going to obtain a mortgage decision-in principle before putting in an offer (a higher number than I would have expected so some good news here).
• 55% understood what is meant by ‘exchange’, although 37% believe exchange is the collection of keys and moving in.
Now, given these are ‘newbies’ to the home-buying purchase perhaps we can’t expect too much in terms of knowledge – after all, put yourself in a similar position (especially if you didn’t work in the housing market) and ask whether you would have had that knowledge.
What it does show is that there is a low level of understanding around the whole process, and there will be an increasing reliance on the ‘professionals’ holding their hand and taking them through all the steps in order to get them into their house.
Providing that information and knowledge does not just happen by magic, and if first-time buyer clients are anticipating you carrying out tasks, and you’re not even responsible for them, then there is still going to be a level of frustration and anguish about what happens next, and who really is going to make things happen.
First-timers might be easily dismissed as new to the scene and therefore wet behind the ears, but what happens if a client believes the seller is going to pay the stamp duty, only to find some way down the line that they are responsible for stumping up the cash.
Of course, the government has cut stamp duty for those purchasing under £300k in England and Northern Ireland, but first-timers still do buy properties over this amount and therefore they’ll still have to pay this tax.
The same goes for those in Wales and Scotland who pay under their own specific schemes.
All professionals interacting with first-timers have the opportunity to educate and inform, and by doing so have the same opportunity to hold onto that client for many years to come, plus of course the potential for recommendations and referrals.
In essence – and this is something we have all known for too long – the process can seem overly-complicated for those who have never gone through it before.
Just the terminology of ‘conveyancing’, ‘exchange’, ‘stamp duty’ and the like, can go over the heads of those who will need to know what is going on, will need to respond adequately and promptly, and will need to have the deposit/mortgage monies to be able to deliver the purchase through to its natural conclusion.
Add in other factors, such as Help to Buy schemes, Help to Buy ISAs, perhaps shared ownership, and we might not be surprised that buyers get confused.
Our focus has been on making the process simpler and easier to understand, but it does require concerted effort across all parties to educate clients on what is happening and what it means for their purchase.
We already seen large numbers of clients come to us with unmanageable expectations in terms of exchange and completion – that becomes even more difficult if the client doesn’t actually know what this means. The Government Guides should help but it’s up to us all to make both their lives, and our own, that much easier.
*Eddie Goldsmith is Chairman of the Conveyancing Association (CA)