Government’s Home Buying and Selling Reform
Will the Government’s Home Buying and Selling Reform Consultation Increase or decrease the speed at which the market moves?
Kevin Shaw, National Sales Managing Director, LRG
The government’s consultation on Home Buying and Selling Reform is a step in the right direction. It recognises what every estate agent and conveyancer already knows: property sales take too long and fall through too often resulting in considerable frustration and abortive costs.
I welcome the ambition to shorten the 120-day average transaction time by around four weeks. The proposed solution is bold, but achievable, given the proliferation of “proptech” which if coordinated will support it.
At LRG we already operate a number of processes that are in alignment with the consultation’s aims, so we’ve seen first-hand how, for example how early information, digital tools and clearer workflows can help make the system faster, fairer and less stressful for everyone.
That said, it’s important to recognise that reforms of this scale invariably come with trade-offs. Some stages of the process will inevitably take longer initially, and not all agents will adapt at the same speed unless they are made mandatory from the on-set.
One of the central proposals is that sellers provide key information (lease details, service charges, ground rent and title data) upfront, before a sale is agreed. Unpleasant surprises are a significant factor in sales falling through and identifying those issues earlier in the process ultimately benefits both buyers and sellers.
We’ve already addressed the streamlining of material information requirements by partnering with a number of businesses including Kotini. This digital platform brings together material information quickly and efficiently, and currently approximately 75% of clients complete the required forms (including TA6 and TA7) within three days.
Up front transparency reduces speculative activity, creating a market of committed vendors.
Some of the criticism of the proposed reforms is based upon Home Information Packs (HIPs) of almost twenty years ago. HIPs failed not because the concept was wrong, but because the technology wasn’t ready. Sellers were asked to spend hundreds of pounds compiling documents that often went out of date before a sale was agreed, forcing them to pay again. Today, digital platforms provide a cheaper and more efficient means of supplying this information.
We’ve found that digitisation also improves cash flow and productivity. Faster completions mean fewer stalled chains, less wasted time and healthier businesses. In that sense, what’s good for consumers can also be good for the industry.
There is a risk that smaller independent agents or conveyancers could face higher upfront costs in adopting new systems. But in the long term, competition among software providers will drive prices down and the efficiency savings will more than offset the initial investment.
Even if the reforms are fully implemented, they will not be a panacea. Local authority search delays remain a real constraint in some areas, (although digital communication is improving access) and lenders’ underwriting panels and surveyor capacity can also slow progress, especially during busy periods.
We must also be realistic that these changes won’t affect every type of transaction equally. Simpler freehold sales and new-build properties will see the greatest benefit; rural properties, leaseholds and managed estates may still take longer because of the volume and complex nature of information involved.
But that’s no reason to delay reform. The market will move faster overall, and the gains will compound over time as systems integrate and users adapt.
Of course, all of this sits against the wider backdrop of fiscal policy. We’re in something of a phoney war at the moment, anticipating the November’s Budget. In reality, the Chancellor’s decision on property taxation will determine whether these positive reforms land in a buoyant or a subdued market.
But long term, the direction of travel proposed in this consultation is right. A system that rewards preparedness, transparency and professionalism is one that benefits everyone involved.
You May Also Enjoy
£3bn tenant deposit shake-up on the cards
Brexit housing market winners and losers
The Rental Market is Rebalancing
Dispelling the top five biggest letting agent myths
A fifth of Gen Z would move 25 miles or more for affordable housing
