Improving the home-buying process

17 December, 2018

Issues and problems with the homebuying process are never far from the spotlight and it is no different at the moment. Whether it is lengthy purchase processes, poor advice on leasehold purchases or consumers being duped out of monies online the news often seems bleak. Behind the scenes though there is much work being done to improve the process for consumers.

From the Government looking at major changes to improve the home buying and selling process to small tech start-ups developing secure and fast ways to pay, solutions are now springing up all over the place to speed-up, streamline and secure the biggest purchase of your life.

So, what’s happening to make things better?

Helping consumers

Cash may be king, but information is power, and the more informed consumers are when they embark on the homebuying process the better equipped they will be, and the smoother the transaction is likely to be. As such, conveyancers are being encouraged by new regulations and guidelines to make sure that the process is as transparent as possible from the outset for the consumer.

These requirements to support customers being able to make an informed choice covers areas such as clearly setting out the process to clients at the start of the process, being clear and upfront about the fees involved and quality of the service provided.

Fees are an easy point for comparison, if, they are made available to consumers in a standard format to ensure that like for like is being compared. While research repeatedly shows that only a minority of consumers choose the cheapest lawyer they can find, cost is nonetheless important, and at the CLC we are working with the industry to provide consumers with clear, concise and comparable information. But it is very important not to choose on price alone. To find a conveyancer who can truly meet your needs you should consider how they deliver their service and what other clients have said about the quality of that service.

When it comes to quality of service, as a minimum, consumers should always check that the conveyancer they engage is registered with either the Council for Licensed Conveyancers or the Solicitors Regulation Authority. Beyond that, we are encouraging the firms we regulate to look at consumer reviews, in the form of independent review sites, as we know, when asked, most consumers say they regularly draw on customer reviews of products and services when assessing quality.

Information available at the outset

The property purchase process in England and Wales involves consumers viewing properties, making an offer and having it accepted before embarking on the process of discovering vital information about a property through searches and surveys. In Scotland, far more information is provided to purchasers prior to offers being made and steps are now being contemplated to bring this into the property market south of the border.

This is important because many purchases stall or fail when information about a property comes to light. Armed with the information at the start, consumers can make an informed decision about whether to offer on a property and what that offer should look like to reflect the state of the property. This would prevent stalled sales, and disgruntled purchasers and vendors alike when sales fall through. While the Government are looking at ways of ensuring more information is provided upfront new entrants to the market are trying to provide better information now.

Streamlining the process through digitisation

There are several examples of niche technology companies turning their attentions to the property market to provide solutions which will allow for a smoother, quicker purchase process for both purchaser and vendor, such as Dot button, a US based technology company, who have recently facilitated some one-click purchases in the UK. Their system allows purchasers in the buy-to-let market to browse available properties, and then click to purchase, triggering the financing, purchasing, conveyancing and even furnishing of a property.

At the other end of the scale, HM Land Registry’s digital street programme has been able to demonstrate how digital title information, the paper documents showing the chain of ownership for land and property, could be made available alongside the usual property details as a property is marketed.

The Government’s online Verify service also makes provision for anti-money laundering checks to be undertaken and the advent of open banking allows for mortgage offers to be made online. There are also a number of online conveyancing firms, in addition to traditional firms who now also offer online services. All of these will help to overhaul and streamline what is currently a disjointed and lengthy process.

Secure transfer of funds

Much has been made in the media of innocent homebuyers falling prey to fraudsters and being swindled out of tens, if not hundreds of thousands of pounds. Scary as this is, the chances of it happening to you are low, but it does pay to be vigilant and to ensure all details are thoroughly checked with your conveyancer. At the same time, steps are also being taken by companies to create systems that will help make such fraud a thing of the past through the introduction of escrow systems.

An escrow system reduces the risk of fraud by verifying the identity of all parties, holding funds securely and only releasing funds directly to all relevant parties when all sides agree they’re happy for the transaction to proceed.

This helps protect both vendors and purchasers from having money intercepted, or it being diverted to an unauthorised source, and recently the CLC supported pilots of an instant digital escrow facility which powered the UK’s first fully digital mortgage settlement. Those pilots demonstrated the potential benefits to home buyers and sellers in terms of greater security and greater confidence around completion dates and times.

We may still be some way from fully digitised property transactions that take days instead of months, but the building blocks are being put in place for the UK to have a system which will make smooth, efficient property transactions the norm.

For further information on any of the above areas, visit the CLC website.

This article originally appeared in What Mortgage

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