Those who remember my long involvement in the battle over Home Information Packs will be unsurprised that the news of an MHCLG (Ministry of Housing Communities and Local Government ) consultation on improving the home buying process caused me to raise a sceptical eyebrow.
Sure enough, the consultation document is, broadly speaking, reminiscent of “Key research on easier home buying and selling” housing research report, published by the DETR ((Department of Environment, Transport and the Regions – the forerunner of MHCLG) in December 1998.
Way back then they were talking about how a third of transactions fell though, how the legal process took too long, how buyers needed more upfront information, how people lost money when sales fell through etc etc. If you had added in the word ‘digitalisation’ (which was almost unheard of in those days) you could have foretold what a lot of the consultation document of 2025 would look like.
Another striking parallel is that the 1998 document backed up its claims about the awfulness of the home buying process by the selective use of statistics that mostly didn’t stand up to scrutiny. I am not for a moment casting doubt upon the figures provided to MHCLG by Landmark Information Group – who are one of only three sources quoted – but since the current consultation carries no detailed research data it is not possible to analyse the claimed figures and we are expected to take the stats at face value.
This is especially true of the headline-grabbing assertion that failed transactions cost buyers and sellers around £400m per year. The footnote to this particular figure says it is derived from ‘TPX Impact research for MHCLG, unpublished’. Apparently TPX Impact is ‘…a digital transformation company supporting organisations to build a better future for people, places and the planet.’
When a government department, pushing an agenda on behalf of its political masters, uses unpublished ‘research’ to make a sweeping claim that conveniently underpins their case for change, I think eyebrow-raising is forgivable.
And let’s not dwell too long on the more spurious window dressing that MHCLG has liberally sprinkled through the consultation document. The red herring of the wonderfulness of the Scottish system of property transfer is of course there; Norway, Australia, Finland, Estonia, and star of the 1998 ‘research’, Denmark, all get honourable mentions. Trailing ‘binding conditional contracts’ sounds marvellous but we all know how vanishingly rarely they are practicable. Oh, and they want to ‘professionalise’ estate agents because ‘too many are failing consumers’. I call B.S.
It’s fine to have a far-reaching ambition to improve the home buying process but it is not possible to create beneficial change at a stroke and I fully expect MHCLG to fall into exactly the same hole that the its forerunner fell into with Home Information Packs. They’ll try to change everything and end up changing nothing.
MHCLG has five objectives:
Faster, more reliable transactions
Reduced fall throughs and risks
High professional standards
Better informed consumers
Trust and confidence in the system
All very laudable, though only the first two have real relevance, but there are several elephants in the room…
So long as most home buyers have to sell an existing property before proceeding with the purchase, we shall have chain transactions. We all know that chains move at the speed of the slowest and we all know that chains break. Unless MHCLG can come up with a way to abolish death, divorce, debt, job loss, pregnancy, and people simply changing their minds, the chain – or indeed any sale that is subject to contract – will be at risk. I must admit that I have no idea how we could do away with chains.
So long as mortgage lenders require conveyancers to dance through multiple hoops, dot every ‘i’ and cross every ‘t’, and unwilling and unable to risk a professional negligence claim, never take a pragmatic view on anything, the legal process will take a grindingly long time. Add in the dominance of the mass-conveyancing outfits who pile it high and sell it cheap – and as a consequence give staff case-loads that inevitably cause delay – plus the apparent inability of many conveyancers to communicate by 21st century means, and it is certain that transaction times will remain painfully extended.
So long as local authority and Land Registry searches take weeks and weeks (always assuming the Land Registry isn’t swamped with its usual backlog) there will be delays.
So long as Managing Agents can take as long as they like and charge what they like to provide service charge information there will be delays.
Having searches and charges info ‘up front’ in some sort of pack may help but will not of itself resolve the issue. And sellers will not tolerate the delays being front-loaded if they have to provide a HIP type package at the time when a property goes on the market.
Where the consultation is spot on is in stating that, ‘Technology must underpin this change.’
In technology terms we are light years from the time when HIPs arrived and there are dozens, if not hundreds of initiatives under way to enhance and improve data communication in the home buying process. If the multiplicity of commercial companies and state entities such as local authorities can develop a cohesive whole then we will see improvements that benefit everyone involved in buying or selling a home.
The so-called digitalisation of the processes will bring immense changes. Where MHCLG may have a struggle is in getting the disparate industries and professions to fully embrace those changes. Blunt imposition will not achieve success.
If these issues are not dealt with before we get saddled with HIPs Mark 2 there will be major problems and very little benefit to anyone (except perhaps for the commercial entities that exploit the changes – remember the Home Condition Report inspectors debacle?).
Let us hope that the current consultation is a genuine attempt to listen to knowledgeable people engaged daily at the coal-face of the process and not a rehash of 1998 when the policy had already been set in tablets of stone before any real consultation took place. I won’t hold my breath.
Doing nothing is not a desirable option and the impact of technology will be profound. But if current Housing Minister Steve Reed thinks there is a magic wand in the form of digitalisation to solve the ills of the home buying process at a stroke, he’s in for a big disappointment.
The elephants will trample his ambitions.
