The following article has been extracted from The Law Society Gazette:
The government is to publish a ‘call for evidence’ later this year to modernise the homebuying experience amid concerns about Conveyancing.
During the debate Colchester MP Will Quince, a qualified solicitor who specialised in residential property work, put forward several suggestions on ways to improve and speed up the process.
These include a pre-contract financial commitment ‘which would be forfeit should the seller, without warning, raise the price or pull out without warning’ in order to tackle problems around the practice of ‘gazumping’.
Quince agreed with another MP who mentioned the ‘ill-fated’ home information packs introduced in 2007, that any change to legislation should involve consultation with the estate agent industry and legal profession to ensure changes are beneficial to the process.
The controversial packs were scrapped in 2010. The government said at the time they were ‘holding back the housing market because sellers are having to fork out extra cash, sometimes hundreds of pounds, just to be able to put their home up for sale.’ Suspending them would also ‘remove a layer of regulation from the process’.
Quince also suggested that the mortgage application process could be simplified and standardised, which could include industry-standard instructions and documents for conveyancers to deal with.
He told MPs: ‘I recall in practice the minefield that was the Council of Mortgage Lenders’ handbook – part one, two and three – with all lenders having differing requirements. Reducing the handbook would lead to a reduction in the work that a conveyancer needs to do and therefore considerably speed up the process.’
Quince said there was a strong argument for deciding on agreed protocols and procedures.
‘I recall in practice that it was only when a sale was agreed that conveyancers were instructed and a retainer paid to the conveyancer that they would send out the property information protocol forms to their clients,’ he said.
‘These forms are far from simple and they took several hours, if not days, to complete, and this meant at least a week of delay before these were returned to their conveyancer and then could be sent on to the purchaser’s conveyancer.
‘I believe comprehensive and standardised questionnaires would create consistency and enable those selling a property to complete the forms when a property is originally put on the market.’
Other suggestions include requiring estate agents to obtain basic information at the point at which a property is marketed and provide ‘more detailed, standardised’ property questionnaires from the conveyancer to complete while a buyer is being sought.
A centrally held database of management packs could be part of regulation of the sector that deals with leasehold properties.
However, Quince directed some of the blame for delays in the conveyancing process towards conveyancers. A move towards ‘factory conveyancing’ was not only leading to delays but also potentially costing the clients, he said.
‘As fees fall, the margins fall, and firms need to take on more and more work to remain profitable,’ he added. ’This means that many conveyancers are reactive instead of proactive, not out of choice but out of necessity. It is the client that then suffers, as conveyancers are not able to meet their rightly high expectations.’
Noting Quince’s suggestions, Raab said few people in England and Wales seemed particularly keen to use conditional contracts as a matter of voluntary practice or to protect themselves in light of transaction risks, such as cost-guarantee or lock-in/lock-out agreements.
Raab acknowledged this could be due to costs or a lack of awareness, or difficulty in securing such terms. But he warned that the ’lack of use or take-up should give us some pause for thought before prescribing a single mandatory remedy as a silver bullet’.
He added there may be ‘wider’ benefits in making property information more accessible online, noting that the move for Land Registry to take over the local land charges register from local authorities would help to reduce overheads as well as eliminate regional variations and practices.
He said a call for evidence on options to modernise the home-buying process, announced at the time of last year’s autumn statement, will be published by the Department for Business, Innovation and Skills ‘later this year’, which will invite evidence and proposals from the property industry and consumers.
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