Yesterday’s story in EYE about government plans for property transactions, and the opposition from some in the conveyancing world, unsurprisingly generated much comment.
The press release of the announcement from the Ministry of Housing, Communities and Local Government (MHCLG) last Sunday, 9th February, was optimistically headlined, ‘Home buying and selling to become quicker and cheaper‘. It immediately put me in a deja-vu state of mind.
25 years ago the predecessors of the present government, in the shape of the then Labour housing minister, Nick Raynsford, and the civil servants in what was then known as the Department for Environment, Transport and the Regions, expended vast amount of time and effort (and probably considerable sums of money) in their ill-fated attempt to ‘improve the home buying process’.
A charitable view of their track record in pursuing the aim to speed up transactions, do away with uncertainty in the process, and save consumers money that was being lost in wasted time and fees, would be that they were sincere and well-meaning.
A more realistic assessment might conclude that they failed to consult with people who really understood the process, were blinded by dodgy statistics, wedded to policy and not pragmatism, hoodwinked by those who saw opportunities for financial gain in the shape of sellers’/home information packs, and deaf to any criticism of their plans.
No wonder that a battle-royal took place over a period of nine or ten years between government and those of us who were of the view that the proposed changes would substantially disrupt the market – and not for the better – cost the consumer dearly, and ultimately fail to materially improve the home buying and selling process.
The current MP in charge of MHCLG is Matthew Pennycook. Ironically, he succeeded Nick Raynsford as MP for Greenwich and Woolwich when Raynsford stepped down in 2015.
Pennycook’s ‘about me’ page on his website shows he’s had experience of working in the charity and voluntary sector but there’s nothing to indicate a qualification or career role that particularly fits him for the position of Minister for Housing and Planning. In that respect he’s hardly different to any other of the long parade of here today-gone tomorrow housing ministers who have been installed in the post in recent decades. And it may explain why he apparently believes that digitalisation is some sort of silver bullet to solving the issues of the home buying and selling process. If he does believe it, then he’s in for a rude awakening.
So perhaps he and his boss, Angela Rayner, might do well have a sit down with someone who knows only too well that attempting to make home buying and selling quicker and cheaper is fraught with difficulty. I’m referring to the present Home Secretary, Yvette Cooper. Between about 2003 and 2007 she was, as an Under-Secretary and a Housing Minister, intimately involved in progressing the Home Information Packs legislation through Parliament, against fierce opposition. The legislation eventually passed but HIPs were then suspended in 2010 by the incoming Conservative administration.
Cooper initially batted off criticism of her government’s proposals for the home buying process, but as time went on it became clear that she had begun to realise there were serious flaws with the scheme, and with the so-called statistics on which the government had based its policy decisions. It is my view that she eventually understood that HIPs could never deliver on their promise. She might give a timely warning to Pennycook and Rayner that bigging up policies via catchy but ultimately vacuous headlines can lead to spectacular negative outcomes. Rayner is going to find that out anyway when the projected annual house building requirement figures are shown to have been nothing more than an exercise in headline-grabbing futility.
So, here we are, 25+ years after the whole ‘improving’ thing began and we are arguably no further advanced. Will Pennycook be able to make a difference? Frankly, I very much doubt it. Especially as he appears to have swallowed similar nonsenses to those swallowed by his predecessors.
Just read Sunday’s press release…
‘One of the key reasons the buying and selling process can be long and frustrating is a lack of digitalisation and join up in the sector…’ Is digitalisation really at the heart of the ‘long and frustrating process’? No, it isn’t.
‘…which is why the government is opening up key property information, ensuring this data can be shared between trusted professionals more easily, and driving forward plans for digital identity services to slash transaction times.’ Will digital identity services really slash transaction times? No, they won’t.
And I will bet my shirt on estate agents not being included in the charmed circle of ‘trusted professionals’.
‘These reforms will make home buying fit for the 21st Century and give much-needed certainty to everyone involved in property transactions…’ A frankly ludicrous assertion, given the myriad reasons why there isn’t any certainty for everyone involved in property transactions.
‘By making information available at people’s fingertips, it will be far less likely for surprises to be encountered later on in the process. This will make it easier for people to get onto the housing ladder…’ I think Mr Pennycook will find that affordability is a rather more relevant factor in determining the ease of getting on the housing ladder.
And finally – ‘Currently, fall throughs – which impact one in three transactions – cost people around £400 million a year, on top of the four million working days lost by conveyancers and estate agents alone which is equivalent to £1 billion. By bringing the process into the digital age, and learning from success stories such as Norway where transactions complete in around one month, the government is putting more money into the pockets of hardworking people and delivering on our Plan for Change to grow the economy.’ Oh dear, here we go again. Statistics being used to arrive at very questionable conclusions.
Digitalisation may well be desirable. But anyone who believes it will make a substantial and significant improvement to the home buying process is wishfully thinking. Of itself it certainly won’t make home buying and selling quicker and cheaper.
Unless and until we deal with the fundamental blocks to progress, such as the mortgage process, money-laundering regs, management information delivery, search and land registry information, and yes, estate agencies more interested in listing fees and third-party addon fees than effective sales progression, there isn’t going to be much beneficial improvement in the home buying and selling process.
And all this is before we get to the real cause of most transaction failures – human nature. Good luck to whoever tries to get to grips with that one.
Nick Salmon is managing director of London Wallet. Prior to founding EYE he had a long career in estate agency and led the SPLINTA campaign in opposition to HIPs proposals.
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