The Government has recently announced that it wants to reform and modernise the home-buying process to make it “cheaper, faster and less stressful”. Issues such as ‘gazumping’, where a seller accepts a higher offer from a new buyer, will be addressed. The Government wishes to build upon recent proposals intended to tackle unfair abuse in the leasehold sector such as protection for renters and a crackdown on unfair managing agents.
The Housing White Paper set out plans to address the broken housing market by getting the right homes built in the right places and measures to improve affordability and protections for renters and home purchasers. The call for evidence will look at how the Government can facilitate further improvement in the home buying experience. More than a million homes are bought and sold every year and recent research suggests that an average of three in ten purchase transactions fail to reach a successful conclusion after an offer has been accepted. The most common reasons for this were a change in the buyers personal or financial circumstances or as a result of a poor survey.
The Government commissioned a survey of 2,000 people who had bought or sold a home in the past two years and this revealed that 69% of sellers and 62% of buyers reported stress and worry as a result of delays in the current process. As part of the review, the Government will look at the way the house buying process works in other countries. The perception is that it is quicker and more certain in other jurisdictions such as the USA and Denmark but it is also much more expensive.
Evidence is being sought from everyone with a professional interest in the industry including estate agents, surveyors, solicitors and lenders. The current process is multi-staged and complex and not easy for the public to navigate. Issues can arise throughout the transaction from an adverse survey to a defective title or a delayed mortgage offer. As a part of the consultation the standards and regulation of estates agents and concerns around leasehold and new build properties will be considered.
Whilst not looking to ‘rip up the existing system and start again’ the Government is taking views on the following topics:
- Gazumping – how to stop this.
- Building trust & confidence – mistrust between the buyer and seller is one of the biggest issues faced according to research. The Government wants to consider schemes including ‘lock-in agreements’ to increase confidence in the housing chain.
- Informing customers – how to provide better guidance for buyers and sellers, by encouraging them to gather more information in advance so homes are ‘sale ready’.
- Innovation – whilst searching for a home online is relatively straightforward, the buying and selling process is too slow and costs time and money and therefore the Government is looking for digital solutions including making more data available online.
More can be read, including how to respond to the consultation (which will run for 8 weeks from 22 October 2017), here.
We at Blake Morgan will be participating in the consultation and look forward with interest to the results when they are published.