Towards the end of October 2017, Sajid Javid, Secretary of State for The Department for Communities and Local Government released a 25-page document calling for evidence on how to improve the home buying and selling process.
Spread over 14 chapters with a foreword written by Sajid Javid, he makes the point that with 1 million homes transacted each year, the often reported experience is that, “...it took longer than expected, cost more, and was frustrating and stressful…”
As this is a “call for evidence”, there is an online questionnaire that asks for your opinion about the way the property industry is structured. You only have until the 17 December 2017 to respond.
Waymark has provided a brief overview of the document along with a closing comment as to what we would like to see happen.
The introduction highlights the key areas of concern namely that:
There is the need for various professional parties (estate agents, solicitors, surveyors, lenders etc.) for a property to be transacted. However, their respective business pressures and regulatory requirements cause interdependencies that can cause delays and fall-throughs.
All transactions are “Subject to Contract” meaning that a selection of checks and balances have to be performed. This is typically a non-refundable cost to both seller and purchaser with no legal commitment to buy or sell.
The department’s own research concluded that the cost of an aborted sale to a seller was between £582 and £740. As an aside, this could easily treble as online estate agents are paid upfront regardless of finding a buyer.
The Law Society’s Conveyancing Protocol lays out 70 steps and procedures that make up the transaction process. It only takes a single issue to hold up the whole process.
There was also an acknowledgement that some progress had been made with the increased use of the Internet to view thousands of properties quickly and easily along with HM Land Registry making more data available. Also, it was recognised that the use of mobile technology was helping lending sources agree mortgages in principle in a matter of minutes.
When it comes to estate agents and in particular, the letting industry, there have been various proposals for a lettings register and the need for all lettings agents to achieve a minimal industry standard. We have made reference before to how unregulated estate agency is and that both directors of Waymark are qualified surveyors promoting a high standard of professionalism and knowledge throughout our business.
As previously mentioned, for anyone who has bought or sold a property, the majority of hold-ups and problems tend to occur during the legal conveyance of a property. This is not to say that solicitors and conveyancers cause the issues, however, they are bound by certain processes and protocols that have been in existence for hundreds of years.
There is likely to be an increased use of technology to facilitate a change in the buying and selling process. HM Land Registry has already made more property data available but there is still some way to go before we reach a digital e-conveyance process accessed by all those involved.
Mortgages & Lenders
The mortgage market has probably benefited the most by leveraging technology to provide loan agreements in minutes. Lending sources seem to have successfully ‘joined the dots’ between a buyer’s personal circumstances and creditworthiness. The area for improvement is the link between the surveyor and the lending source.
Educating Buyers & Sellers
The Call for Evidence asks for opinions about more information being made available during the marketing process. This has been something that has been talked about for at least the last 30 years, culminating in the failed launch of Home Information Packs (HIP’s) which were removed as a selling requirement in 2010.
One of the main challenges with providing more information up-front is that there is both a time and cost overhead along with the question of where does the responsibility to produce this information lie? This is probably one of the key areas that technology can help. With more property information being digitalised, through a secure online platform, estate agents should be able to produce enough supporting information at the push of a button.
We have always been champions of supporting improvements in estate agency from a professional, process and commercial perspective. Being surveyors and members of RICS, we are already governed by a code of practice for our commercial work that we apply to our residential sales and lettings business.
When it comes to the buying and selling process, the estate agency element has benefited considerably from technology. All our properties are online be it via our own website or the main property portals. We use software to match the right applicant to the right property and then progress the sale to a successful completion.
The parts that we have less control over are to do with conveyancing and lending sources. It is improvements in these areas and a more joined-up approach that would ultimately benefit consumers by reducing transaction times and the number of fall throughs.