They say there is no such thing as bad publicity. If that was the case, then the property search industry must surely be in the midst of its finest hour.
This side of the industry has been around for more than 20 years, but has arguably demanded more column inches since home information packs (HIPs) were introduced in August last year than it has in the previous 19 years put together.
HIP to it
The introduction of HIPs thrust personal searches into the limelight. Designed to give consumers more information to base their buying decisions on, HIPs were supposed to speed up the conveyancing process, with all key searches being carried out when properties came to market, as opposed to after offers had been accepted.
These searches are carried out by two parties – privately-owned personal search firms and local authority departments. In a competitive search sector, with both groups playing to the same rules, the industry should have been more than capable of playing its role in this process.
It has not been so simple. The difficulty stems from the fact that the local authorities not only provide searches, but are also responsible for holding the data from which all searches are based, allowing them to set prices and access rules which their personal search rivals must abide by.
This was what the Government was seeking to address in January when it issued good practice access guidelines for local authorities, which stated that local authorities must make the data required to compile property searches available to all those who ask, and must be provided within 24 hours. Eight months on, this has not happened; those local authorities abiding by the guidelines are in the minority, with an average time of three weeks taken for personal searchers to be granted access (‘Slowest Councils in the South East’, mortgagesolutions-online.com, 6/8/08).
Unfortunately, this is not the only problem the Government is struggling to address. There are similar issues surrounding charges for data required to compile a property search, with local authorities historically having carte blanche on charges. Higher costs for data mean higher costs for consumers, and this has led to something of a postcode lottery, with costs ranging from £40 to £280 depending on where the homeowner lives.
The Office of Fair Trading (OFT) looked at this issue as early as 2005, and a CLG consultation paper issued in January addressed the issue by stating a preference for charges to be based on a cost recovery basis. It is encouraging that action is being taken in this area, but the proposed approach could again end up having limited or no effect.
Allowing local authorities to set their own charges for access to property search data, whether based on a cost recovery basis or not, will lead to the cost of local authority inefficiencies being passed on to the private sector, potentially increasing the cost of HIPs. The proposed ‘cost recovery’ charging is ill-conceived and short-sighted. It fails to provide local authorities with any incentive to improve the efficiency of how they collate and hold property search data and its consumers who will ultimately be forced to foot the bill. Placing additional costs on selling a home is poorly timed.
Get the message
This is a message that was clearly conveyed in the report deputy chief Executive of the Land Registry Ted Beardsall produced on local property searches for Housing Minister Caroline Flint. Beardsall effectively gave a warning that local authorities must make significant reforms to their property search offerings or risk being squeezed out of the market by the faster, more cost-effective and consumer-focused private sector.
The report indicated there has already been a 20% shift in the proportion of local authority searches versus private sector searches over the past two years, from a ratio of 65:35 to 45:55. Without immediate improvement, local authorities search services could be reduced to simply providing data to the private sector for them to compile searches.
Beardsall’s report also explored something essential if the search industry is to move forward and deliver a faster, more streamlined service that adds substantial value to the consumer when buying property: a move to the electronic provision of local authority data, or ‘data banking’.
This was echoed in Sir Bryan Carsberg’s Review of Residential Property. Sir Bryan emphasised that not only should local authorities make data available quickly, efficiently and at a reasonable price, but also that there should be the objective of electronic availability online as soon as practicable. Embracing technology and storing local authority property search data electronically is key in speeding up the conveyancing process and it would be a major step towards true e-conveyancing.
Unfortunately, the one thing both Carsburg and Beardsall’s reports were missing was a clear framework as to how this could become reality. If the Government was prepared to put measures in place to ensure that all local authorities had to store data required to compile property searches electronically, in standardised format and accessible online at a set charge, this would have the potential to solve many of the problems that the industry currently faces. Once in place, issues such as access to data, variations in charging and excessive time taken to turnaround searches would vanish overnight.
That said, it is a massive job and one that must be researched and planned extensively before work begins. But it is something that is essential in order to remedy many of the current issues the search industry faces and, more importantly, ensure the sector plays its part in delivering fast, cost effective and fully informed residential property transactions – an ambition that should be shared by all industry stakeholders. n
Mervyn Pilley is chairman and chief executive of the Council of Property Search Organisations
