The government wants to fix home buying, but its plan won’t work in Northern Ireland

Sellers in Northern Ireland could face over £1,000 in upfront costs before a single buyer views their property, but the government’s roadmap contains no acknowledgement of this. Philip Armstrong, managing director of Armstrong Solicitors, says the roadmap addresses none of the issues causing property sale delays in Northern Ireland and will only mislead buyers, not protect them.

The objectives in the government’s new homebuying and selling roadmap are ones that every solicitor, estate agent, seller and buyer in Northern Ireland would agree with: faster transactions, fewer failed sales, better-informed consumers, and higher professional standards.

Nobody is arguing with the destination; the problem is the route.

After two consultations last year, the government has published a 12 chapter reform plan that is, in large parts, built on a misunderstanding of what actually causes property transactions to fail, and in Northern Ireland specifically, it proposes solutions to problems that are not the primary problems we face here.

Legal information without legal advice is not protection

The centrepiece of the roadmap is the sales pack: a bundle of information provided upfront by the seller, at the point of listing, before a buyer has appointed a solicitor. The theory is that more information earlier means fewer delays and fewer collapsed sales.

The categories of upfront information most commonly cited in the roadmap – tenure, sewerage, ground rent, planning permission, and water supply- are all legal matters. The roadmap does not explain who is supposed to interpret this information for a buyer who has no solicitor and no legal training. Indeed, it would potentially be placing a lot of responsibility on the estate agent to provide legal information.

Legal information presented without context does not protect buyers. It misleads them. We already see this, properties being rejected because buyers have misunderstood legal issues (especially around leaseholds), they were never equipped to understand in the first place. Providing more of that information earlier does not solve the problem. It scales it.

A binding conditional contract with no legal advice is a legal nonsense

The proposal to introduce binding conditional contracts at the point of offer acceptance, before solicitors would be instructed, is one of the most troubling elements of the roadmap. This is not yet law, and legislation is not expected until the end of this Parliament at the earliest. But the direction of travel is clear, and the problems with it need to be said now.

A legally binding commitment, entered without legal advice, is not a consumer protection. It is a liability.

The government lists exceptions that it anticipates will allow either party to exit: death, chain collapse, a change in financial circumstances, and newly discovered property information.

That final category is essentially a catch-all for legal issues, which means the contract is less binding than the word implies. Conveyancers logged the lowest levels of support of any professional group in the consultation, and most of the qualified conveyancing solicitors in private practice who have commented so far, are universally concerned. Given that solicitors are the ones who will be managing the fallout from contracts signed without their involvement, the opposition deserves serious weight.

In my experience, the vast majority of sales collapse because of a legal or mortgage issue, not because a buyer has simply changed their mind. A binding conditional contract with broad exit clauses does not address that. It adds confusion about what people are actually committed to. The current system of getting in to contact in Northern Ireland, especially in a chain, is certainly not perfect, but it’s preferable to the concept of a binding conditional contract, which is something of a contradiction in terms.

What is really causing delays in Northern Ireland?

The government’s roadmap treats upfront information and technology as the main levers for reducing delays. They are not the main levers. The real causes of delay in Northern Ireland are fivefold.

Anti-money laundering requirements on solicitors are legally enforced, extensive and cannot be short cut. Unregulated managing agents overcharge for basic information and contribute to significant delays. Arbitrary and changing requirements from mortgage lenders and their panel managers cause uncertainty in the process. And some firms undercut on fees, take on more than they can manage, and then fail to act in time to avoid delays and uncertainty.

None of those are addressed in the roadmap. More upfront information does not fix any of them.

The one proposal that will make a difference

There is something in the roadmap worth supporting: the expectation that sellers will instruct their solicitor before a property is listed, so that legal work begins at the listing stage rather than after an offer is accepted.

Conveyancers have been making this argument for years. The Law Society of Northern Ireland, RICS and Propertymark, industry representative bodies for solicitors, surveyors and many estate agents in Northern Ireland, agreed this nearly a decade ago, but take up of this simple step has been frustratingly slow.

Early instruction reduces delays and allows legal issues to be identified before they become the reason a sale falls apart a few months later.

That is a genuine reform. The rest of the roadmap needs significantly more work before it achieves the same.

The cost question nobody is answering

Sellers in Northern Ireland should also be aware of what upfront information at this level of detail is likely to cost.

Based on what we see in practice in Northern Ireland, property searches and property certificates covering tenure, sewerage, water, planning and building control currently run to around £350 in outlays alone. Add a solicitor’s professional fees and a condition report from a surveyor, and sellers are realistically looking at well over a thousand pounds committed before a single buyer has viewed the property. The roadmap contains no acknowledgement of this.

Perhaps there’s an implication that  no-sale no-fee arrangements might be employed here, but no decent solicitor, estate agent or surveyor could commit to the huge amount of time and investment involved without being paid for that work. Worryingly, there is no suggestion of how sellers on tighter budgets would manage the initial outlay.

The goal of a faster, fairer, more transparent homebuying process is the right one. But the technology-first, information-first approach being proposed will create new risks without solving the existing problems. The roadmap states that most of its measures are expected to apply in England, Wales and Northern Ireland.

What it does not demonstrate is any working knowledge in the English Ministry of Housing, Communities and Local Government of how conveyancing in Northern Ireland actually operates: where property data comes from, how title is held, or what the real drivers of delay are in this jurisdiction.

 

About the author

Philip Armstrong is the managing director of Armstrong Solicitors, a well-known commentator on the Northern Ireland conveyancing process and chair of the Law Society of Northern Ireland’s Conveyancing and Property Committee. He has designed Northern Ireland’s first in house conveyancing web app, which simplifies the moving house experience for sellers and buyers, and allows estate agents and mortgage advisers to receive real-time updates on transactions. In addition to residential conveyancing, Philip is a recognised expert in private landlord and tenant law, acting for and advising multiple landlords, letting agents and tenancy deposit scheme administrators in Northern Ireland.