Last month the Department for Communities and Local Government launched a call for evidence for improving the home buying and selling process, the deadline for comments being 17th December 2017. As conveyancers, we’re very interested in not only the outcome of the Call for Evidence but more importantly, our own clients’ views.
Current government figures state that around 40% of transactions in a year fall through before contracts are exchanged, leaving sellers and buyers disappointed and often out of pocket. What can be done to prevent this happening? The Scottish system is often held up as an example but Kyle Peddie from Your Conveyancer, a large conveyancing firm in Dunfermline, stated last week on BBC Radio 4’s Money Box Live that the system in Scotland was not working as was intending and conveyancing in Scotland is being slowed down.
Actually, on listening to that programme (and you should be able to pick it up as a podcast), most of the discussion was dedicated to what can be done to speed up the conveyancing process, with examples of different countries’ systems such as Denmark and Australia being highlighted as working well. But do our clients want the process to be made faster? For years, the pressure has been put on conveyancers to speed up conveyancing from a variety of sources – estate agents, mortgage brokers, for example – but is this always a good thing? We understand that our clients need the certainty of knowing that the deal will go through at the agreed price and on a date to suit as soon as possible; after all, most of us have been in the same position ourselves and felt equally frustrated at the one person in the chain who is still waiting for a local search or a mortgage offer but we have the professional advantage of understanding the conveyancing process and perhaps knowing when to be worried and when to be simply patient.
A digital property process?
Digitising the process has again been put forward recently as a way of speeding things up, meaning that all information regarding a property can be accessed quickly and reliably. This is absolutely fine in theory but what happens to all that information about a property once it has been collated? Let’s look at a straightforward freehold purchase. The buyer’s conveyancers will usually put together a report for their clients, including details relating to the legal title to the property, the results of all the searches carried out, the seller’s completed Property Information Form and Fittings & Contents Form and details of any enquiries made of the seller’s solicitors as a result of that information together with the replies obtained.
It has been suggested that because the legal title to a property rarely changes between successive owners that really that information should be available immediately. While that is true, in our experience most of our enquiries and therefore delays relate to what changes a seller or previous owner may have made to a property so we need to check planning and building regulations – were they obtained if required, are all the appropriate certificates in place etc – and whether any physical changes were made in breach of a covenant that there may be on a title. This all takes time and if you start thinking about the purchase of a leasehold property where a buyer’s conveyancer also needs information directly from a landlord or management company and in some cases both, it takes even longer.
Understanding your report
Even if you’ve never bought a property, I hope that so far you’re appreciating that there is a lot of information to be obtained and checked out before a sometimes lengthy report is sent to a client.
Clients need time to digest this report. They may think they know the property but did they know that under the terms of the deeds, a previous owner ought to have obtained consent from the original developer who built the property over 30 years ago before building an extension? We know that some of this information will be unexpected and that you, our clients, need to have time to go through the information and make sure you are happy that you understand what you are buying. According to a previous BBC Radio 4 Money Box programme, some buyers are feeling pressured into exchanging contracts more or less immediately they receive the report.
Time to exchange
So where is this pressure to exchange coming from? In England, clients are often in a chain where sellers and buyers need to exchange and complete their transactions on the same day. Pressure may therefore come from other people in the chain who have been waiting for you to catch up. A broker may be anxious for the deal to go through quickly so that he gets his commission and similarly an estate agent. Some firms of conveyancers who accept referrals from agents and brokers for which they are paid referral fees are also under pressure to complete a certain number of transaction per month. Rest assured, that doesn’t include Berwins, where we will always put our own clients’ interests first.
This is just a small part of what was covered in the radio ‘phone in this week and what has been in the press generally. Other issues that worried clients who called in with some very sad experiences relate to gazumping and gazundering, the poor state in which some properties have been left on completion and how long it can take to obtain a mortgage offer.
If you listened to the radio live or have since caught up with podcasts after reading this or simply have your own experiences to go by, we would really welcome your comments. You are our clients and we want to help make the process of moving home as smooth as possible for you.
The question of leasehold reform is a whole new blog …
Diane Scott is a residential property specialist at Berwins and handles all types of residential conveyancing matters