The Housing, Communities and Local Government Committee (HCLGC) released early findings from its Affordability of Home Ownership inquiry, due to be published later this year, which related to the home buying and selling process.
The committee wrote to housing minister Matthew Pennycook, saying that responses from stakeholders suggested the current process was a “painful experience” that did not motivate people to move, and ultimately slowed down the housing market.
Its letter said: “It risks unnecessary costs for buyers, sellers, other stakeholders, and the wider economy.”
The committee said reducing these barriers would encourage more people to move, reduce failed transactions and make the process more affordable.
Several stakeholders mentioned the importance of upfront information to allow buyers and sellers to make informed decisions, and the HCLGC noted that the Ministry of Housing, Communities and Local Government (MHCLG) had already considered the use of real-time data to resolve this.
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The committee recommended mandating certain information upfront when a property first comes to market.
It said buyers and sellers could withdraw from a transaction at any point, which was the most common reason for fall-throughs.
The committee wrote: “England is unusual internationally for allowing withdrawals at any time,” adding that offers were legally binding in Scotland, while in Spain, there were penalties for not going through with a sale.
It proposed making transactions more binding earlier in the transaction process through conditional contracts, binding both parties to a transaction once certain conditions are met.
“Failure to follow through on transaction once the conditions are met should lead to financial penalties,” it said, adding: “Furthermore, MHCLG should investigate other ways of reducing the time gaps between offer and completion.”
The committee also suggested regulating estate agents, saying that currently, this was only done “lightly”.
It said accreditation, such as becoming a member of an association like Propertymark, was voluntary. In Scotland, where letting agents are regulated, the committee said consumers reported higher standards of satisfaction and professional competence.
The HCLGC recommended introducing a Code of Practice and a mandatory qualification for property agents, including estate agents. It said this should be overseen by an independent regulator, who should be able to enforce the Code of Practice through fines or other penalties.
It also suggested updating the Estate Agents Act 1979 to make sure it was fit for purpose, saying this had not been reviewed for over 40 years.
The home buying and selling process is ‘gruelling’
Florence Eshalomi MP, chair of the HCLGC, said: “The current home buying and selling process in England and Wales is far more difficult, stressful, and gruelling than it should be. The path to homeownership is littered with delays and collapsed transactions due to gazumping and broken chains. In addition to the personal impact involved in each case, these hurdles only serve to exacerbate the affordability crisis and make getting on the housing ladder more challenging.
“I hope the housing minister will pay close attention to our recommendations and take the clear action needed to improve the buying and selling process for people across England and Wales”.
