Home buying and selling reform: Are we looking at the whole picture? – Rudolf

Its roadmap sets out a sequence of measures designed to change how property information is provided, how professionals work together and, ultimately, when buyers and sellers become committed to a transaction.

The programme covers comprehensive upfront property information and sales packs, digital property logbooks, greater use of digital ID and Qualified Electronic Signatures (QESs), higher standards for property agents and, further down the line, binding conditional contracts, with the government making clear the latter will only be introduced after sales packs have been embedded.

For conveyancers, this represents a potentially significant change to where they sit within the home moving process, but the implications extend far beyond our profession to mortgage advisers, lenders, estate agents, surveyors, technology providers and, of course, clients.

Over this series of three articles, I want to look at what the reforms could mean in practice across the home moving market, some of the concerns and assumptions developing around them, and whether there are commercial opportunities – alongside the challenges – for those businesses involved in getting people from listing to completion.

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Looking beyond individual measures

One of the difficulties with a reform programme of this size is that it is very easy to take one proposal in isolation and decide whether you support it based entirely upon its immediate impact on your own part of the market.

Conveyancers will understandably want to know whether they are being asked to undertake additional work, take on greater liability or carry additional cost, while estate agents will be concerned about anything that might delay a property being marketed and finding a proceedable buyer, and lenders need confidence in the quality and reliability of information they receive.

Mortgage advisers have an equally important interest in making sure reform works, because the mortgage process does not operate independently of the transaction it is financing, and delays, unexpected property issues and failed purchases can mean considerable additional work for advisers as well as frustration and expense for their clients.

Those are all legitimate considerations, and The Conveyancing Association (CA) will continue to raise the issues affecting our members and the wider industry, but there is a danger that individual concerns become accepted as reasons why reform cannot work before we have considered how the different elements are supposed to fit together.

Binding conditional contracts are a good example, because there has understandably been considerable discussion about the implications of requiring buyers and sellers to become committed earlier, but the government’s roadmap specifically says they will only become mandatory after upfront sales packs have been embedded.

After all, who would want to financially commit to purchase a property without knowing if they can use it as they wish and get a mortgage on it? With the sales pack and shareable material information, their conveyancer can advise them of the legal issues, they can see what specialist reports are required on the condition and their broker can ensure they only apply to lenders who will lend on a property with that title and condition. They can even get a mortgage decision in principle (DIP).

That sequencing matters, because asking somebody to commit earlier only becomes realistic if sufficient information is available to allow them – and the professionals advising and financing them – to make informed decisions.

We are all part of the same transaction

One of the most important things we can take from the reform programme is recognition that the different stages of a property transaction cannot continue to be considered entirely separately.

An adviser might secure the right mortgage for their client, but that work can subsequently be affected by a legal issue with the property, a problem elsewhere in the chain or information emerging much later that changes the client’s ability or willingness to proceed.

Equally, the conveyancer is dependent upon information from buyers, sellers, agents and valuers, while lenders require information and assurances before they can release funds, and technology increasingly determines how efficiently information can move between everyone involved.

The consequences of a problem rarely remain with the party who first encounters it, which is why reform cannot simply involve transferring work or responsibility from one profession to another and expecting the transaction to improve.

Instead, conveyancers, advisers, lenders, agents, surveyors and technology providers need to consider what information others require, when they need it and how we avoid repeatedly asking clients for information that already exists elsewhere in the process.

Where is the commercial opportunity?

From a conveyancing perspective, earlier information could mean earlier involvement, with legal issues identified at a point when there is time to resolve them and firms having a clearer opportunity to demonstrate the value of that work and charge appropriately for it.

However, there is a commercial argument for the wider market too, because fewer transactions running into avoidable problems should mean less duplicated and abortive work for advisers and agents, greater certainty for lenders, and fewer hours spent by everyone trying to rescue transactions that might have been more straightforward if the right information had been available earlier.

None of that means any part of the market should accept reform without scrutiny, particularly where legitimate questions remain around cost, responsibility, liability and implementation, but we should be equally careful about assuming change necessarily creates additional burden without asking what inefficiencies it might remove.

The good news is that none of us are being asked to do anything we do not already know how to, we are just being given the opportunity to do it in a different order. If we test it now and get it right in the voluntary stage, then the legislation delivered will enable us to reduce waste, improve cashflow, and have happier customers and staff.

In the second article in this series, I will look specifically at upfront property information, including whether it risks simply moving existing delays to an earlier point in the transaction, who should undertake and pay for the work involved, and how getting information and professional expertise into the process earlier could create opportunities for conveyancers while also benefitting advisers, lenders, agents and their clients.