Buying a home can be a stressful experience, but reforms announced this weekend could make the process less of a headache. After making an offer, 65% of buyers and sellers continue to worry that they won’t make it to completion, according to research from the Department for Business, Energy & Industrial Strategy (BEIS).
This indicates the depth of stress and confusion that surrounds home sales. Earlier this week, the Ministry of Housing, Communities and Local Government (MHCLG) revealed its plans to improve the home buying and selling system following a consultation on the topic. Take a look at the key proposals that have been put forward.
- Impose a 10-day timeline for local authority searches While most local authorities are quick to respond to search requests, the government found some were holding up the process and causing delays. Local authorities will now be expected to respond to all search requests within 10 working days, with the government warning it would take ‘appropriate action’ for those that fail to meet this timeframe. Find out more: exchange and completion: the steps to finalising a sale
- Make voluntary reservation agreements standard Reservation agreements combat ‘gazumping’ (where a seller accepts an offer, then sells to a different buyer instead). Once a buyer and seller sign a reservation agreement, the buyer has the right to buy the property within a set time frame and the owner cannot sell to anyone else. To reduce the number of failed transactions, the government hopes to develop a shorter, standardised reservation agreement that can be used for any transaction. It will launch a pilot of these agreements with a view to making them a standard part of home selling in future. Find out more: making an offer on a house or flat: everything you need to know
- Encourage decisions in principle A ‘decision in principle’ is a letter from a mortgage lender confirming how much they are likely to lend to a buyer. You can find out more in our guide to applying for a mortgage. The government plans to encourage the use of decisions in principle for all non-cash buyers and will make this a recommended step within its home-buying guides.4. Develop tools to rate conveyancers. Delays in conveyancing can hold up the entire property chain, so the government plans to work with industry to develop transparent data and standard metrics for rating conveyancers’ performance. In the long term, the government would like to see this information made public on conveyancers’ websites.
- Estate agents required to hold professional qualification Currently, you don’t need any specific training to become an estate agent, despite their involvement in high-value transactions. The prospect of a mandatory professional qualification for estate agents is currently being consulted on, and the government has indicated that legislation is likely to follow.
6. Develop digital signatures and e-conveyancing. New technology has the potential to make transactions digital, from signing the contract to releasing funds. The government plans to establish a technology working group to better understand how technology could change the home-buying process. In particular to prioritise investigating digital signatures, improving ID verification and promoting the use of e-conveyancing.
(Source: Which Magazine)