The government plans to force sellers and estate agents to provide information about the property before it’s listed, in a bid to speed up the sluggish transaction process.
Binding contracts could prevent either party pulling out late in the process, eliminating issues of gazumping, where a seller raises the price after accepting an offer, or gazundering, where the buyer lowers an offer after a higher one was accepted.
The proposals, known as Home Buying and Selling Reform, are under consultation.
Tomer Aboody, director of specialist lender MT Finance, said: “This is some positive news as these proposals would speed up the home-buying process. As we know, the current system which is often plagued by multiple delays can, and does, result in some transactions falling away.
“The proposals to reduce costs along the way are also helpful although the potential savings are not that significant compared with the amount of stamp duty buyers need to pay. If the government was able to combine this new financial saving with potentially some reduction in stamp duty, this could fuel activity in the market at the same time as speeding up the process.”
The mandatory information would include: tenure, council tax band, EPC rating, property type, legal and transactional information like title information and seller ID verification, leasehold terms, building safety data, standard searches, property condition assessments tailored to property age and type, service charges, planning consents, flood risk data, chain status, and clear floor plans.
Labour called the move “the biggest shakeup to the homebuying system in this country’s history”.
The government estimates that reforms will speed up transactions by four weeks, saving buyers around £710 in the process.
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, said: “Digitisation and clear professional standards are long overdue and will help raise the bar across the industry. It’s encouraging to see a genuine focus on collaboration between government, agents, conveyancers and lenders to deliver a system that truly works for today’s buyers and sellers.”
More cynical responses
The Conservative Party likened the announcement to Labour’s proposal to introduce Home Information Packs in 2007, which was scrapped by the coalition government in 2010 after labelling them “expensive and unnecessary”.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, felt more cautious about the bedding in process for such changes.
He said: “More efficiency and less waste in home moving must be welcome but not so easy to achieve in practice as these proposals are not new.
“What we don’t want to see above all is a drop or delay in transactions which would be more costly not just for buyers and sellers but for job and social ability which is so fundamental to economic growth.
“On the ground, as long-standing chartered surveyors and estate agents, we have found many sellers do not necessarily want to reveal ‘warts and all’ about their properties whereas for others speed is not paramount so will need time to adjust.
“Sufficient capacity will be essential too in terms of numbers of suitably qualified and experienced surveyors to take on the additional workload as a significant number of additional detailed inspections will be required than at present.
“The legal profession will also need to become conversant with the new arrangements asap, for instance to determine what are ‘reasonable’ grounds for withdrawal, to avoid gazumping and gazundering to ensure the smoothest possible delivery after consultation.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, also expressed cynicism regarding the change.
He said: “While we fully support measures to speed up the process of buying a home, these suggestions are largely underwhelming, as they don’t address the main issues.
“Lenders can produce mortgage offers within very short timeframes but it’s the conveyancing which can really slow down the home buying and selling process, with local searches in some areas experiencing severe delays, for example.
“Building the 1.5 million new homes we need, speeding up the planning process, incentivising buyers and reforming stamp duty are the key measures the government needs to focus on to really make a difference.”
