How the government plans to make the home buying process “faster and less stressful” following recent review

House buying has long been a lengthy and oftentimes, tense process. From individuals pulling out of chains, delayed mortgage acceptance and a generally bureaucratic procedure it can sometimes take months or even longer to complete on a property purchase. The UK government want to get more people into housing that is affordable, widely available and in a way that causes as little aggravation to the parties involved as possible.

This forms the basis of a full government review that initially started as rental market review and expanded to a full audit on the complete property market. Here are the things that the UK government are going to be implementing to make the house buying process more seamless and angst free.

Crackdown on gazumping

Historically, purchasing a property was a nervy experience, upon making a bid on a property and having that bid accepted left no guarantee to the purchaser that they would still be completing on the purchase. This is due to a practice known as gazumping, whereby another buyer will out bid the previous bid and the original purchaser would lose out. Bearing in mind this can happen at any time up to the exchange of contracts, home buyers were sometimes left scrabbling around with mortgage offers to amend, solicitor’s fees to pay and a completely fresh start looking for a property.

The government realised this is a serious flaw in the process and was causing misery to thousands of home buyers each year. To combat this, they are introducing new rules to make the house bidding process more robust and ensure that the buyer and seller honour obligations; resulting in a much more stringent progression and heightening buyer trust. Under new proposals, lock in agreements will be made mandatory meaning that neither the purchaser or seller can back out without reasonable cause. To read a little more about this you can find more information here: www.theguardian.com/money/2017/oct/21/house-buying-rules-review-gazumping-clampdown-by-government

Estate agent regulation

Perhaps one of the most painful costs to bear when purchasing a house are the estate agent fees. The government have already taken strong action against “unfair” lettings fees and don’t plan to stop there. The estate agency industry is fast developing with many people now choosing to market and sell their properties themselves or by using online agents for reduced fees. Challenges will continue for high street estate agents as the government plans to implement a consumer-friendly set of rules and improve regulation and accountability for estate agencies.

Currently estate agents are regulated by the Estate Agents Act 1979which is enforced by a very small team. The issue with the existing act is that there is currently no minimum standard of professional competency and the government want to make sure that anyone operating in this field is conducting themselves in a professional and respectable manner.

In order to achieve this, they are amending the existing act to create a more transparent and accountable framework as well as introducing mandatory qualifications to practice estate agency. This shake up is likely to be retrospective as well with many practicing estate agents being required to attain the necessary qualification to continue practicing.

House builder accountability

In theory a house builder already has professional obligations to a house buyer. The issue is that these aren’t being taken seriously by the building industry. Government findings found an alarming 98% of all first-time house buyers had reported some form of issue to house builders. With complaint levels so unacceptably high the government want to make sure that going forward this percentage drops significantly.

Proposals on the table could see house builders being sanctioned for not behaving in a responsible manner. Complaints will need to be addressed fully and correctly and in cases where a house buyer is put at a disadvantage (such as an extended build completion date), house builders will have to provide some form of redress. You can find out more about this particular part of the review at: https://www.gov.uk/governement/consultations/strengthening-consumer-redress-in-housing

Offer to completion time reductions

Selecting the right conveyancer or solicitor to process the paperwork and conduct the necessary checks could be the difference between an expedient completion and a lengthy one. Typically, it takes 8 to 12 weeks for the process to transit from offer to completion. A timeframe that the government is very critical of.

Going forward, they are working with the legal industry and customers alike to roll out faster technologies and reduce the need for wet signatures on documentation. They want to bring the house buying process up to date, reflecting the technology already available across like industries. This new e-conveyancing will reduce times significantly and improve customer satisfaction.

The government put particular emphasis on working with innovators in the legal industry. Woodgrange Solicitors LLP advise that all conveyancers should always be making a continuous effort to improve process times regardless of government targets and consultations.

Processing information in a more efficient way

One of the key delays identified during the house buying process is that information is requested on an incremental basis as the process develops. The government found that the time it takes for respective parties to return information is also lengthier than would ordinarily be acceptable. The onus now will be on providing all and any relevant information as early in the process as possible. Particularly the government wants it to be completed up front before the processing begins.

This will be most important for mortgage lenders, local authorities and freeholders, who will now need to gather or return as much information as possible before they get the house buying ball rolling. Decisions in principle will be more thorough and local authorities will have strict deadlines to adhere to when returning documentation. This will reduce the mortgage failure rates and reduce the amount of time conveyancers have to take chasing local authorities for vital information.

Currently 25% of all transactions fail each year. There are many reasons this occurs, but on a basic level the government implementations should reduce this percentage drastically. The aim of the measures is to reduce transaction failure rates as much as possible, ensuring customers are treated fairly by all parties involved and keep the property market buoyant and accessible.