This is my last blog about the mortgage industry before I move across to Bellpenny and the investment and wealth sector.
I thought I would use this to talk about the housing market and pose, what is admittedly a broad question: why are property transactions taking longer to complete? It has been widely accepted for many years that the housing transaction process takes around 12 weeks from start to finish. However, the process is now much closer to 16 weeks. So what has changed? Why does it take four months to complete the process?
I don’t believe for one minute that the Mortgage Market Review (MMR) or the length of time a surveyor is acting is having any impact on the overall transaction lapsed time. Indeed, you could argue all of the lenders that are currently trying to concentrate on service and lapsed times is moot, since at present, you have nearly all offers within 28 days lapsed with survey completed. So look at it another way, the finance is almost always confirmed as available to the conveyancer usually before the title and local authority searches, which are rarely completed within this time.
So, we are looking at service improvements in the wrong place. The heart of this issue is the conveyancing process. Conveyancing is often undertaken by very small firms and lenders either don’t want to or are scared to approach The Law Society to tighten up conveyancing panels.
Vested interest
You would be amazed at some of the stories the largest, professional conveyancing firms have. Solicitors shut for two weeks over Christmas and Easter. Why when we insist on the best for lending and the best for surveying are we all accepting less than best from the conveyancing firms?
It is a classic case of vested interest precluding process improvement. If a commercial firm – an expert in its field – has £1m in a client money account and does one conveyancing case a year, are the banks going to be that interested in stopping them conveyancing?
Finally, I want to look at the Land Registry. In my opinion, the sooner Land Registry is in private hands the better. I would call on the government to reinstate the privatisation. Why does it take two months for the title to be completed? Why can’t we aim for 28 days or even 15 working days? Automate and attach all title documents from the local authorities to the address in question. Automate everything and only give the IT to conveyancers who commit to do a minimum number of transactions – that way both issues can be sorted.
Currently, the industry is blindly accepting a property purchase process that is paper led, wasteful and takes a long time – why? It is the customer who suffers when we allow the process to be governed by the professional bodies. Ultimately getting it right for the customer must be the driver and therefore change is needed.
Nigel Stockton will start his role as CEO of Bellpenny from 1 September, with ex-Lloyds head of strategic partnerships Peter Curran to take over from Stockton at Countrywide from this date
