Lessons learned from the digital transformation of conveyancing in Australia are valuable, but we need a local approach in the UK, says James Bawa, UK CEO, PEXA
Australia’s conveyancing sector has come a long way from the days of queuing at the land registry to update a title. In today’s tech-first world, it’s hard to imagine having to complete a property transaction in-person, or only accepting payment by cheque, even though that was the case in Australia just 10 years ago. It’s even harder to imagine that reality in the UK, where the conveyancing process started being improved through digitisation years before.
Yet, Australia’s adoption of property technology means it has not only caught up with the UK, but its conveyancing experience is much further ahead in its digital evolution. Consumer detriment in the UK is significant, and there is a clear incentive for service providers to adopt technology that will improve efficiency and customer outcomes.
Different starting positions
It would be naïve to assume a one-size-fits-all approach. As one of the world’s most vibrant fintech hubs, the UK is far from luddite. But the mortgage market in the UK differs from Australia. Regulatory frameworks vary, like stricter affordability assessments in the UK and stress tests aimed at ensuring responsible lending practices. Mortgage products are offered by a wide range of lenders, some 300+ across the UK, compared to Australia’s 150 or so.
Nonetheless, the aim in both markets remains the same; leveraging digital technology to enhance the efficiency, transparency, and speed of property transactions, ultimately driving a better experience for consumers transacting property. While there are certainly lessons we can take from PEXA’s expansion in Australia, the solution to digitise the UK’s conveyancing market must suit the our specific requirements.
Building trust
A decade ago, the main, if not only, technology used by law firms in Australia was a case management system. Today, firms leverage PEXA’s technology to process over 85% of the country’s property transactions, worth some AU$3T to date. But that did not happen overnight.
While we’re starting from a significantly more advanced position in the UK than when we began in Australia, we are following a similar pathway; to collaborate closely with industry players and provide the technology which meets the specific challenges faced here. We don’t have all the answers, and working hand in hand with industry is key to ensuring we drive towards a future where consumers can approach the home buying experience without the trepidation they feel today.
Eliminating pain points
Not being able to check on a transaction’s status at will is a point of friction in the process for the UK’s lenders and conveyancers, whose experiences have historically been quite decoupled, as it makes updating customers more challenging. PEXA’s technology allows lenders and law firms to collaborate in a secure, online environment to complete the tasks they need to submit an application for registration to the land registry, and exchange funds. Parties have improved transparency making it easier to check on a transaction’s progress without the need to email or call one another.
The need to check client accounts many times over is another challenge. Waiting for funds to clear from lenders, and worrying that they might arrive post the CHAPS cut-off time, has left far too many families in removal vans overnight. Our solution is underpinned by PEXA Pay, just the seventh net settlement scheme to clear through the Bank of England, and the only one dedicated to property transactions. PEXA Pay is live, meaning lenders and law firms alike are already benefitting from the seamless movement of funds directly between lenders at central bank level – no more refreshing screens, desperately hoping funds have arrived so buyers are not left homeless over the weekend – and consumers are not accruing interest on both their outgoing and incoming loans while payments move through the existing process, and are reconciled.
In Australia, we’ve been pleased to work closely with the land registries across the country to incorporate validation checks in-system, driving the requisition rate down from 20-30% to a fraction of a percent. This has all but eliminated the rework many firms undertake post-completion. While this might not be something we can deliver tomorrow in the UK, we aspire to get there.
A champion for good for the mortgage industry
We are dedicated to improving consumer outcomes. We are also committed to working with the ecosystem of professionals who make up the UK’s conveyancing market; law firms remain at the heart of our process. Digital remortgages and completions will help eliminate manual processes, reduce errors, and expedite property transactions, freeing up time to increase their capacity and focus on technical legal work – not removing law firms’ professional responsibilities. Yes, change will be required, but if the outcome promotes a faster, more streamlined and certain experience for consumers, it will be worth the effort.
Against a backdrop of the Consumer Duty coming into force in the UK, the timing is ripe to pull together and move towards a more efficient digital way of transacting property. If we can apply our learnings from Australia and tailor them to the UK through industry collaboration, we have a significant opportunity to raise the bar across the industry, drive transformation, and significantly improve customer outcomes.
2 Responses
PEXA’s growth in Australia occurred for two reasons. Both huge mistakes that entrenched a market monopoly & should be avoided in the UK.
1. The initial shareholders of PEXA were the State Govts – who lost millions over a decade long period by trying to implement econveyancing individually, rather than on a national level.
2. After going operational in Australia and having very minimal take-up by industry, PEXA was mandated for use in VIC & then NSW (the two biggest jurisdictions). So the State Govts (who owned shares in PEXA), mandated its use, increased its value & then sold out to recoup millions.
Without a mandate, econveyancing would have nowhere near the traction in Australia that it does today.
Hi AusConveyancer thank you for sharing your comment. We are hoping we can provide some clarification for you on some of your points. In Australia, mandates were not promised by the governments. The government only considered mandating as an option due to the sufficient momentum in industry at the time.
Today, PEXA operates as a listed entity and we’re funding our UK expansion ourselves. We are investing heavily in a bespoke technology build, and proudly recruiting locally without the need for government investments.
We know we need to deliver a solution that enhances the conveyancing experience for lenders, firms and consumers, and that’s what we’re focused on delivering.