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Government housing reforms – how can the home buying process be improved?

  1. 10 April 2018
  2. By Andi Michael

If the current housebuying process is ‘not fit for purpose’, what can be done to fix it?



Back in October 2017, Sajid Javid and the Ministry of Housing, Communities and Local Government put out a call for evidence in the hopes of improving the process of buying and selling property in the UK. This ran for 8 weeks, asking 25 questions and giving participants the chance to share their issues with buying and selling property in the UK. There were 1205 responses, 932 from individuals and 273 from organisations, most of whom were involved in the property industry.

A fair few recommendations have been made in response to the call for evidence, and some are more straightforward than others. Reallymoving were pleased to support the government by offering some of our insight gleaned from almost 20 years in the industry.

Below are some of the main points discussed:

Estate agents to have official qualifications and training

One that might make estate agents feel they are once again under attack, the government has suggested that the public would like their estate agents to have received formal training. The idea of becoming licenced was also floated. Whilst overall people seem to be satisfied with their estate agent experiences, the fear of ‘rogue agents’ was clearly a concern. Consumers want to feel that they can trust their estate agent with a huge purchase, and transparency along with an understanding of how estate agents are regulated, will put buyers and sellers at ease.

Banning referral fees and transparency

Whilst this has been a point of contention for a while, the government has made it clear that they do not intend to ban referral fees. The issues here are fears that this could cripple some estate agents who depend on these fees, as well as losing out relationships with conveyancing solicitors or mortgage providers. Instead, the government is focusing on making these referral fees as transparent as possible, so that customers know how much their estate agent is paid for that recommendation, as well as being able to compare prices between the recommended service and others available.

Digital solutions

The government recognised that digital technology is being used to make the buying and selling process more efficient, as seen by the Land Registry’s recent update. They plan to support PropTech companies working to innovate e-conveyancing, as well as accepting digital signatures and streamlining ID verification. This comes along with an understanding that fraud during the buying process becomes easier through email access, so security has to be a priority. Another popular suggestion was an online chain view, so that people could see where they were in a chain, how the sales were progressing and identify any problems or hold ups. There was also the question of whether digital technology could work to release funds more efficiently, meaning buyers are not left waiting around for keys and spending more money being held up on moving day.

Reservation agreements to stop gazumping

One of the main concerns with our current property buying system is the lack of protection against gazumping or gazundering. The government’s suggestion was a voluntary reservation agreement that both parties enter into, in order to solidify the sale. They also acknowledged that streamlining the buying process and making it more efficient meant sales were less likely to fall through.

Educate the buyer and seller

The government intend to release ‘How to Buy’ and ‘How to Sell’ guides that inform the public of the expected process, as well as things to be aware of. This is to follow on from the ‘How to Rent’ guides that are currently given out to tenants. A large number of responses from the government have been about educating the public on the process of buying or selling, as many do not know where to turn if something goes wrong, if they need to complain about a service, or who is responsible for certain aspects. Simple elements, like knowing to get a mortgage in principle before putting in an offer, if explained to buyers, could speed up sales and limit fall-throughs.

Freeholds, new builds and searches

Those buying leaseholds were concerned at the time taken to contact the freehold owner, and requested a maximum time limit, along with a monetary fine for the freeholder if they do not respond promptly. Leasehold buyers found this delay was one of the most frustrating in their purchasing process.
Those buying new builds often did not know where to turn, and the government agreed that those who find snagging lists before moving into the property should be able to request these are fixed before moving in. There was little support or knowledge of who to turn to, when new build buyers faced problems.

The government has identified that local searches often hold up the conveyancing process, and as such have agreed to implement a 10 day limit within which searches need to be completed by local authorities. Those who fail to deliver within 10 days will face penalties

Summary

We at reallymoving have always been great advocates for transparency – we think it’s important that people are aware of referral fees, and that they are not obligated to choose an estate agent recommended conveyancer or mortgage provider. In fact, we produced a whitepaper on the importance of transparency concerning legal fees not long ago. We’re pleased to see that the government is taking clear steps to improve the buying and selling process and to make it more efficient, and when it comes to providing clear information for those moving home, we’ve made it our mission to do the same.
 
 
 

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