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Improving the home buying and selling process

19 August 2019

The government has published proposals to reform the residential conveyancing system. This is in response to consumer concerns that the process is slow, expensive and stressful.

Consumer guides

In May 2019, the government released guides outlining what consumers should expect at each stage of the home buying and selling process:

The government is considering how these guides should be distributed to make sure all potential buyers and sellers have the information they need.

Reservation agreements

A reservation agreement is an agreement between a buyer and seller signalling that they plan to go ahead with the sale. If either drops out before exchange of contracts, one must pay compensation to the other.

The government plans to:

  • work with conveyancers to develop and pilot a standard reservation agreement
  • commission research into encouraging buyers and sellers to use the agreements

The government hopes that a short standard reservation agreement will reduce the rate of failed transactions by:

  • encouraging buyers and sellers to commit earlier in the process
  • deterring the seller from accepting a higher offer (gazumping)

Quality standards for conveyancers

Consumers often find their conveyancer through recommendations from friends and family or referrals from estate agents.

The government wants to improve price and service transparency to allow consumers to make a more informed choice. It plans to work with conveyancers and consumers to create:

  • kite marks and quality standards
  • standard data – to help consumers compare the prices and services on offer

Leasehold information

Leasehold property sales can take longer to complete than freehold sales. This is usually because of delays in getting property information from the freeholder or managing agent.

The government plans to:

  • encourage consumers to collect information before marketing their home
  • set fixed time frames and maximum fees for freeholders and agents gathering leasehold information (possibly using new legislation)
  • encourage managing agents to publish information electronically
  • standardise the leasehold information form

Responses to searches

Local authorities can take weeks to respond to solicitors’ search enquiries. This slows down the process and can cause delays to completion.

The government plans to:

  • inform local authorities that they should respond within 10 working days of an enquiry
  • act against authorities that do not meet expected performance levels

Regulation of estate agents

Estate agents are regulated by the National Trading Standards Estate Agency Team (NTSEAT). No professional qualification is currently needed to work as an estate agent.

The government plans to:

  • work with the NTSEAT to enforce the existing regulations
  • consult on creating a professional qualification for estate agents

Reporting of referral fees

Conveyancers and mortgage lenders often pay referral fees to estate agents in exchange for referring business.

The government is concerned that referrals may prevent consumers from making informed choices. It plans to:

  • work with industry to standardise how referral fees are displayed to consumers
  • investigate whether to ban referral fees

Our view

We broadly support the government’s proposals.

Over a quarter of property sales fail every year. We believe the proposals could make the home buying and selling process more open, transparent and efficient.

When implementing the changes, the government should focus on:

  • reducing wasted costs and delay
  • promoting trust between buyers and sellers
  • reducing the failure rate of transactions

Before making any changes to legislation, the government should consult with industry and carry out impact assessments to prevent damage to the conveyancing system.

We updated our Conveyancing Protocol to encourage conveyancing solicitors to:

  • share more information with clients and lenders
  • follow an efficient timetable

Read the call for evidence on improving the home buying and selling process, our response and the government’s response.

What this means for solicitors

The government has said it will work with industry to make incremental changes to the home buying and selling process. No new legislation is planned so far.

The proposed changes should simplify current practices and improve the consumer experience. We expect any changes to the process will be fairly easy for solicitors to implement.

What we're doing

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