I’m writing this on the longest day of the year – the Summer Solstice –…
The Conveyancing Association (CA), the leading trade body for the conveyancing industry, has today (10th April 2018) welcomed the Ministry of Housing, Communities & Local Government’s response to its Call for Evidence on ‘Improving the home buying and selling process’.
The document sets out the Government’s ‘Plan of Action’ to reduce the stress, the time, and the cost associated with buying a home, and outlines a number of mandatory and voluntary measures it would like to see including:
- The regulation and ‘professionalisation’ of estate agents including the need to hold a professional qualification and a requirement to be transparent over referral fees.
- Searches to be available within 10 days.
- Work on the voluntary take-up of a reservation agreement to help combat ‘gazumping’ and failed transactions.
- Leasehold – earlier contact with freeholders to speed up the provision of property information; plus fixed time frames and maximum fees for that information and an encouragement to make this available electronically.
- Encouragement to consumers to get ‘sale ready’ earlier and purchasers to obtain a mortgage decision-in-principle prior to putting in an offer.
Eddie Goldsmith, Chairman of the Conveyancing Association, commented:
“It’s possible to see the footprints of the CA across this paper as the document is filled with references to our recent campaigns, workstreams, and the solutions we have put forward in order to ensure the whole home buying process is made fit for purpose. There is plenty to welcome here, especially when it comes to speeding up the process and the use of technology in order to improve transaction times.
“If we are being brutally honest then we would have preferred a larger degree of mandation particularly around, for example, providing certainty on completion with, for example, with the use of our own Conveyancer’s Code for Completion. That said it is very positive to see the Government referencing the need to improve completion, saying it will work with removal firms, conveyancers and lenders to see how it can improve the release of funds process. Also, in an area like cutting down on gazumping and the number of failed transactions we would very much have liked to have seen mandation on the seller to provide vital information prior to viewing the property.
“‘Encouraging’ sellers is simply not enough. There are obvious benefits to ensuring that the information is collated prior to sale, not least because if it is all available at the point–of-sale there is very much less opportunity for the transaction to fall through. The estate agents we have asked say the biggest reason for fall-throughs is the frustration and stress caused by the delays in obtaining information and dealing with enquiries. Home movers simply give up. Our survey of home movers showed that no more than 2% believed they had received sufficient information prior to offer.
“However, there are some clear and major wins especially when it comes to leasehold, which we have extensively campaigned on, and from now on the huge costs associated with securing leasehold information, especially from Lease Administrators, and the large delays that accompany this part of the process, should no longer happen.
“In a very true sense, the talking though is now over and it’s about implementing the changes that will bring the home buying process into the 21st Century. The CA plans to be a major contributor to the Government’s Stakeholders’ Reporting Committee and our role will be to help facilitate innovations, provide a membership base willing to pilot new measures, and develop working practices in order to meet all our objectives. It has been a major task to get to this point but we now have a pathway forward and the work to achieve these measures can truly begin. “
Government ‘crackdown’ on ‘rogue agents’ to protect renters and leasehold homeowners
The response follows the recent announcement from the Government regarding its proposals to clamp down on ‘rogue’ letting and managing agents, which includes private Lease Administrators.
The CA began a campaign on this issue in 2014 to secure greater fairness and transparency for leaseholders and prospective leasehold buyers who often have to deal with Lease Administrators who can charge extortionate fees and significantly delay the process.
The CA has called the proposals to introduce a new, mandatory and legally enforceable Code of Practice for such agents “a huge step forward in delivering fairness in this part of the market” and “a significant victory” for the Association and those that have supported the introduction of such measures.
The CA also said the Code of Practice will introduce “much-needed” minimum standards for transparency of potential conflicts of interest; transparency of current and future financial commitments to which clients are agreeing; service charges; communication and customer service; handling of clients’ money; and dispute resolution. It will also mean an independent regulator in charge of all aspects of this part of the market.
Beth Rudolf, Director of Delivery at the Conveyancing Association, commented:
“The news from the Government that we will also see the introduction of a Code of Practice covering Lease Administrators is a huge step forward in delivering fairness in the market and a significant victory for the CA, as we have campaigned relentlessly on the poor outcomes that consumers were having to accept, and recommended many of the changes that will now be introduced.
“The commitment to making the much-needed Code legally binding is excellent news, and if it contains the clauses that existing codes have, then transparent and reasonable fees as well as reasonable services timescales will be legally required across all Lease Administrators. This should mean unreasonable fees and delays will be liable to prosecution, which should ensure all Lease Administrators play by the rules, maintain fair pricing and do not make all parties wait weeks and months on end for the information.
“We identified the loophole in the legislation that facilitated the poor practice and this is a momentous point in time for the industry, and it is credit to a huge number of stakeholders that listened and agreed with us, that we will have these changes. It is a real win-win right across the sector and we must credit the entire industry for standing shoulder to shoulder, and the Government for engaging with us and listening to what we had to say.”
For further information on The Conveyancing Association and its ongoing work streams, please visit: conassocstage.wpengine.com