An end to delayed searches?
13 Apr 2018 |
Sophie Roberts |
Government Has Announced ‘Professionalisation’ Of Estate Agents
On Sunday, Housing Secretary Sajid Javid announced measures to professionalise the estate agency market which may have a significant impact on the conveyancing market and our readers.
This announcement was made by way of a press release with further detail to follow but is the outcome of the consultation completed last year by the Ministry of Housing, Communities and Local Government which focused on the stress and pain points in the home buying process and considerable research.
The research found:
• of home buyers that experienced delays, 69% of sellers, and 62% of buyers, reported stress and worry as a result of the delay
• 46% of sellers had concerns about a buyer changing their mind after making an offer
• 24% of sellers would use a different estate agent if they were to go through the process again
• 32% of sellers and 28% of buyers were dissatisfied with the other party’s solicitor
• Whilst the proposals were presented as professionalising estate agents, by requiring them to hold professional qualifications, conveyancers should follow these changes as they will also impact business too.
The government plans to clamp down on the practice of "gazumping" by estate agents among multiple measures announced today in a bid to improve the property market for consumers.
Estate agents will also be required to hold a professional qualification and be transparent about fees for referrals to solicitors, surveyors and mortgage brokers.
The moves will "professionalise" the sector and create a "more trustworthy and reliable industry", the government said.
The Ministry of Housing, Communities and Local Government said it will "encourage the use of voluntary reservation agreements" to limit the unpopular practice of gazumping, in which an agent accepts a higher offer after previously agreeing a price from a buyer.
Timeline on Local authority searches
Other measures will include setting a timeline for local authority searches, so buyers receive information within a set time period. Whilst many local authorities already hit this standard others fail to do.
This can cause delays in the market but as yet we have not seen the detail of how this may happen or what impact it may have on the personal search companies that offer an alternative to an official search.
There is also a focus on referral fees which many conveyancers will welcome and others will oppose.
The press release from the Ministry states “Estate agents will now be required to hold a professional qualification and to be transparent about the fees they receive for referring clients to solicitors, surveyors and mortgage brokers”.
Whilst most agents would argue that they are already transparent in the way they disclose their fees, we suspect the new proposals will go further. They could go to the extent of highlighting the amount the agent earns from the arrangement far more clearly which could make consumers more likely to instruct conveyancers directly.
Estate agents have already found themselves in the crosshairs of the Conservative government, with a ban on letting agency fees introduced at the end of last year.
Leasehold information requirements
Importantly the Government is proposing “requiring managing agents and freeholders to provide up-to-date lease information for a set fee and to an agreed timetable which will end the current situation where leaseholders are at the mercy of freeholders and their agents”
Most conveyancers will welcome this measure as long as its enforceable.
To bring the profession into the technology era, a working group will be set up to bring industry and partners, such as HM Land Registry, together to look at developing innovative digital solutions to speed up the home buying and selling process.
The government will consult on how the industry can be brought up to professional standards, like those in the same trade such as conveyancers, solicitors and surveyors.
Freeholders will also be forced to provide up-to-date lease information for a fee and an agreed timetable, and the government will "strengthen" the National Trading Standards estate agency team.
Housing secretary Sajid Javid said:
Buying a home is one of the biggest and most important purchases someone will make in their life. But for far too long buyers and sellers have been trapped in a stressful system full of delays and uncertainty.
So we’re going to put the consumers back in the driving seat. We will require estate agents to hold a qualification so that people are no longer at risk from a minority of ‘rogue agents’ and can trust the process when buying or selling their home.