A Housing Market of Horrors

At the start of October it was announced that the government would be starting a 12 week consultation to look at ‘Home buying and selling reform’.

“ABOUT TIME!” comes the cry from everyone involved in buying and selling houses and pretty much everyone that has ever bought a house. 

The introduction to the Government’s consultation neatly summarises the ultimate cost of these problems:

“...the current home buying and selling process is long, complicated and frustrating. It takes an average of 120 days to complete once the buyer’s offer has been accepted, and transaction times have increased by 60% since 2007. Around 1 in 3 transactions fail, costing buyers and sellers around £400m per year in wasted costs.”

On top of this, the cost of moving house has increased year on year and the economy is estimated to lose £1.5 billion a year through sales that fall through.

So: it’s costing everyone more money, it’s taking too long - and that’s before we get into the stress and emotional toll and the knock on effect that impacts: solicitors, surveyors, moving companies and also the lost work days and family and personal disruption. 

I’ve been in touch with some of my clients to get their opinions about the current system and what needs to change. With their thoughts in mind we consider the different areas the Government has said the consultation will evaluate. I’ll warn you - some of it might be frustratingly familiar!

You can also have your say by completing the survey here.

WHAT’S WRONG CURRENTLY?

Let’s start with the most common complaints I’ve received.

Why does it take so long?

This was by FAR the biggest complaint because it inevitably leads to other problems and other complaints that disrupt the whole chain. A great deal of the ire in my clients comments was aimed at the issues of sales getting stuck in solicitor’s offices::

“I also think the solicitors take far too long but maybe that’s another story.”

“In our experience, solicitors have no accountability even to their own customers. Regulation should be in place to prevent them from dragging their heels.”

“In spite of regular chasing by the agents, the process of concluding the sellers package extended for a period of six months.”

The frustration at the amount of time it took also extended to confusion that in a modern banking world these transactions shouldn’t take so long on completion day. I will add here that issues on completion day are often exacerbated by a majority of people choosing to compete on a Friday. This means that any problems result in a delay until after the weekend. However, why people should consider moving on a weekday is probably for another blog! 

Lack of communication and accountability.

There is a real grievance at the lack of accountability when things go wrong, and  especially the frustration at not hearing back from solicitors - even though you may be their client!. This has led to a general lack of faith in solicitors, surveyors and estate agents.

Inefficient administration.

Another source of frustration was old fashioned bureaucracy and red tape:  you have to do certain things multiple times from surveys to filling in forms to Anti-Money-Laundering - both people in a couple buying a house can have to pay EACH four or five times!. Then other times you can’t get information! My clients talked about not getting the right information about work that had been done on properties they were buying, as well as information about moving dates or progress with the chain.

There were other complaints such as inconvenient times for handing over keys and agreeing dates much earlier; but the ones above were the main and most common ones. However, we did also have a sort of consensus on some processes that could help make it all a lot smoother.

WHAT SHOULD CHANGE?

There was common ground in the response from my clients. I’ve collated those together with some of my own thoughts below.  Before people shout “how’s that going to work? Who will do it?” I’m not suggesting this is a comprehensive and detailed plan - more a starting point that seems workable. And with the vast sums of money currently being lost, it seems that spending money to make the process better AND could possibly recoup some of those vast sums would be a fiscally responsible idea. 

This approach also takes on board some of the suggestions in the Government's own consultation.

A STREAMLINED PROCESS WITH DIGITAL PROPERTY LOGBOOKS.

I have been banging on about Digital Property Logbooks for years (you can find out more on my page here and about Chimini, who I have partnered with) and my clients that have used them can testify to how useful they are.

Logbook lifeline.

Essentially, like every car has a logbook and MOT, you would have the same for your house.  Your logbook would keep track of services, repairs, any work, any official documentation and receipts. Then - after a set period - you would have the house MOT checking that damp proofing, chimneys, roof, flood defence, boiler, electrics etc, are all ok. Maybe using a traffic light system to say green for all good, amber for aspects needs some attention and red for anything that needs urgent repair. You could then mandate that this needs to be completed again when your house goes on the market.  This would then be available to all potential buyers. This streamlines the process and keeps information in one, easily accessible place. This would be separate to a survey your mortgage lender would require as they simply look to assess the value of your house they do NOT check that everything in the house is functional!

Transparency.

The logbook and MOT combo also provides transparency so that nothing is hidden and unlikely to appear late in a process to stop or delay a sale and break a chain. It also takes some of the stress and worry away about what might occur after a sale. As part of this transparency, there should be more information about your agents and solicitors - the government here is thinking about more certification for people involved in selling houses.

Binding contracts for a quicker process.

This transparency would make it easy to have binding contracts when you agree to a sale. Especially if you then add that both parties commit a deposit to a neutral account - this means there are financial consequences for pulling out of a sale for any reason that isn’t related to an issue with the house.  This should allow for a shorter time frame and to have a contractually agreed completion date. 

The Government consultation ends in December so we shouldn't expect any conclusions - let alone any actual action - any time soon, but it is at least a step forward that a problem has been acknowledged and a motion to do something about it. 

What do you think? What needs changing most urgently? Do you have a different complaint about the process?

Let me know.

A big thank you to Mike, Debbie, Carol and Vaughan, and Sharon for their considered feedback!

(Images from Pixabay: from gerrit and u_91zgw5yq)