What can be done to make moving home faster and less expensive?
This is a burning question and one that has yet to be addressed by Government despite the fact we currently face a major housing crisis and a situation where first time buyers are finding it increasing difficult and expensive to find a home. The problem facing the first time buyer is likely to increase shortly with the withdrawal of the stamp duty concession and the forthcoming changes to how mortgages will operate in the future.
A brave Labour Government sought changes, the first since 1925, with the introduction of the doomed home information pack, but this was shot down in a blaze of glory by the Coalition Government when it came to power in May 2010. Unfortunately in the rush to score political points no one seemed to care that by removing this attempt of reform it left the door open once again for the return of the problems associated with aborted transactions, increased costs and delay.
In fact, we are still left with an antiquated process and one that cries out for immediate reform. The question is whether the current Government has the courage and inclination to do anything about it.
So where do the problems lie?
As the law currently stands it is for the buyer to do most of the running around and to ask the seller questions because the duty to discover any problems with the property rests with the buyer. There is no duty on the seller to volunteer adverse information about the property unless asked. This means we have this bizarre process of having to ask the seller a series of questions hoping that all of the right questions are raised. This is often a long and protracted process and one that could be avoided if the seller was required to bear all about the property to be sold. This could be through thee completion of forms/questionnaires, documents that could be completed when the property is first placed on the market.
Why not get the estate agent to ask the seller to complete the form and to make this available to prospective buyers. At least the buyer could then decide on whether a survey would be needed. All of this would take place before the lawyer is instructed and would save so much time.
Some may argue this is a ‘HIP”. No it is not. There is no added expense for the seller or the buyer. The seller simply completes a form knowing due to a change in the law that the duty to disclose rests with him or her and this forms part of the marketing process. It would save time, it would save money as the transaction could proceed that much quicker and it would mean both seller and buyer standing far more chance of completing the transaction than they do at present.
Before the days of the HIP there were often delays in procuring searches. Due to the shake up of Councils caused by the introduction of the HIP, most Councils have streamlined and improved service levels. On top of this, personal search companies following the collapse of the HIP have faced a drop in demand for searches and this has led to increased competition and a vast improvement in the time it takes to deliver search results.
Search related delay is therefore uncommon.
However it is a bizarre situation that each time a property is sold a buyer is required when purchasing with a mortgage to order new searches. This is often costly. Often the cost of the search package is more than the fee charged by the solicitor!
In a time when the majority of the land in this Country is registered at the Land Registry would it not make sense for information on water and sewage and environmental issues to be noted on the Land Registry Title Document so that future buyers could see that at the outset and decide whether to ask the suppliers of the information whether there has been any change to the data since it was first supplied? The cost of checking would be far cheaper than having to order a new search each time the property is transacted.
The same could apply to planning and building regulation data requiring this also to be noted on the Register the first time a property is sold and the data is disclosed. How many times have property lawyers had to run around after planning and building regulation documents.
On this subject if lenders could make it clear that they are not interested in planning and building documents which relate to matters of over 15 years in age this would also save time and money. Some simple changes to the law to make it clear that no liability can arise on planning and building regulation breaches after a set period of time would put an end to this ridiculous and unnecessary paper chase.
There will always be the occasional problem with title that needs to be addressed through insurance. Why is it not possible that when the effect is found and insurance is taken out that there is not a requirement on the purchaser to register the insurance details at the Land Registry? This would in terms of future due diligence save time and money and also avoid a future purchaser who may not have had the original policy passed to him or her, having to take out and pay for a fresh policy.
Obtaining a mortgage offer once the mortgage is approved is no longer a reason for delay. Most buyers receive their mortgage offer very early in the process. The reason for this is that the lenders are issuing far less offers than they were before and therefore the paperwork of those mortgages they take on is coming through much faster.
Clients who sell have quiet a bit of paperwork to complete and it always amazes me that responsibility of over seeing this rests with the lawyer. I am not sure why the selling agent could not ask the seller to complete these when the agent is engaged. It would save a lot of time and would quicken the process.
I always tell my clients that I can only be as fast as the slowest solicitor in the chain. It is frustrating when you do as much as you can to progress a transaction only to find the solicitor acting for the other party is not responding or taking too much time to respond.
What can be done to improve this? Very little though in a climate where lender panel membership is of importance to the survival of most conveyancers perhaps lenders will in the future take a closer look at the activity and performance of panel members and be more inclined to remove members where there is evidence of repeated ineptness.
I accept a change in the law to reverse the maxim of ‘buyer beware’ would involve a radical switch, however by doing this the whole process would be far more transparent, quicker and cheaper. It would lead to the front loading of information on a sale and if the requirement to register search data at the Land Registry along with title defect insurance was also introduced this would mean a prospective buyer would have to hand before an offer is made all the information he or she would need in making an offer and thereafter engaging a solicitor.
The cost of obtaining the title information, a cost which is already met by the seller may increase due to the extra data recorded and supplied, but this would easily be off set by the saving on not having to order full searches and reduced conveyancing fees due to a more streamlined service.
What are the chances of this happening? Remote I would say as there is too much vested interest in the process as it presently operates and you also have a Government that says on the one hand it wishes to reduce bureaucracy and save costs, whereas on the other hand it has clearly stated it is not keen on introducing regulation that could hamper an already ailing property market. It seems to have little appetite to interfere with the process.
So it looks as if we may be facing another 100 years of operating a slow, costly and totally unfit for purpose home moving process.