Modernising house buying: government response to consultation

The government has further revealed its hand concerning how it plans to modernise house buying and selling in England and Wales. In its October 2017 Call for evidence, the then Department for Communities and Local Government committed to reforming residential conveyancing process to make it ‘cheaper, faster and less stressful’ (ministerial foreword page 4). The consultation closed in December 2017.

On 8 April 2018, together with its response, the government published a summary of what it describes as a ‘fantastic’ level of (more than 1,200 in all) and ‘high quality’ responses. Sajid Javid, Secretary of State for Housing, Communities and Local Government, comments: ‘From reading these responses, it has become clear that there is no ‘silver bullet’ – no one single change which can, at a stroke, fix the process’ (ministerial foreword page 4).

Instead, various practical changes – both ‘big and some small’ – are planned (ministerial foreword page 4). A common thread in the responses, and in the government’s commitment, is to digitalise the conveyancing process as far as possible. 

[H1] Key areas for improvement

• a better consumer experience; 
• reducing the time from offer to completion; and 
• reducing the number of failed transactions. 

[H1] Government proposals

[H2] General points

• Working with the National Trading Standards Estate Agency Team to strengthen enforcement of the existing regulatory framework for estate agents.
• Launching a consultation on creating a mandatory professional estate agents’ qualification.
• Greater transparency around referral fees (potentially banning referral fees, particularly for new build properties and instances when buyers are being referred). 
• New, wide-ranging ‘How to Buy’ and ‘How to Sell’ guides for consumers to include advice on things to consider when choosing a conveyancer, and to encourage sellers to collect together relevant information an effort to be ‘sale ready’.
• Making moving day better by, for instance, working with removal firms; conveyancers and lenders to improve the process around the release of funds.
• Reducing the time between exchange and completion. 
• Speeding up local authority searches (though the government acknowledges that many respondents thought that the searches were not a significant source of delay).
• The introduction of reservation agreements to reduce failed transactions (initially to be piloted) and behavioural insight research will be commissioned to consider ways to encourage consumers to use them in practice.

[H2] Leasehold properties

• Facilitating earlier contact with freeholders given the delays that typically accompany buying a leasehold property, such as the ‘unacceptable’ delays in receiving property information from the freeholder or managing agent.
• Imposing fixed time frames and maximum fees for the provision of leasehold information, potentially with a statutory underpinning, and encouraging managing agents to make this information available electronically to enable instant access.
• Standardisation of the leasehold information form.

[H2] E-conveyancing
In terms of digitalisation, the government intends to set up a technology working group to engage users, industry and partners such as HMLR to better understand user needs for new digital technology and stimulate innovation. 

The working group will prioritise:

• working on digital signatures; 
• improving and streamlining ID verification processes; and 
• promoting the wider adoption of e-conveyancing.
• In addition, the group will work with innovators to explore routes to market for technological solutions.

The conveyancing sector will be watching closely to see how the government’s plans progress.