Upfront and centre

Upfront and centre

At our recent All-Members Meeting we held a number of panel debates on key areas which we believe have the potential to deliver real benefits to all stakeholders in the home-buying process, and (dare I say it) will meet the Government’s aim of making it faster, more transparent, and perhaps cheaper.

One of those was that perennial favourite of the CA – the greater provision of upfront information and whether this might speed-up the whole process if sellers (and their agents) made that information available at the start (preferably at the marketing of the property) and potential buyers were thus able to learn a lot more about the pros and cons of that property before they set their heart on it and put in an offer, only to find later on that all was not quite what it seemed.

We’ve certainly presented the benefits of this type of upfront provision of information in areas, for example, like the marketing of leasehold properties. How, in this day and age, are we not providing such basic info as the length of time left on the lease, especially when we know what a material impact this can have on a buyer’s decision, not forgetting how lenders might appraise their offer of a mortgage?

Again, there should also be a clear understanding of what the lease contains in terms of responsibilities, ongoing fee charges, and the rest. It seems somewhat remarkable that prospective buyers would embark on the process without knowing this, because (once again) this could present them with some clear challenges. Why would you make an offer on a property if you know you’re not prepared to meet the terms of the lease? To only find this out at a later stage seems ludicrous and self-defeating and – not just in leasehold of course – but also results in large amounts of money being lost if the buyer only finds this out after a survey or valuation, for example.

The panel at our meeting all seemed to be in agreement with this but of course we have a rather large ‘elephant in the room’ around any discussion of such information, and that is of course Home Information Packs (HIPs).

We’ve all been told that, when it comes to this topic and the presentation of possible solutions, that to mention HIPs is a no-no, and it’s going to turn off those policy-makers charged with delivering any future changes. However, and we should not forget this, that doesn’t make the idea a bad one; in fact if you talk to most property market practitioners and stakeholders, they tend to agree that HIPs – as they were originally envisaged – were actually the right move, but the changes and vested interests got in the way until they became a watered-down and, in the main, poor quality version of what was necessary.

However, and with that in mind, we understand why Government – particularly one of this persuasion – would not wish to go back there and of course technology/digitisation/the property landscape has changed a fair bit since HIPs were scrapped, not to mention the quality of searches thanks to the implementation of the Search Code. It is however possible to keep the same kernel of an idea and add in everything that is required now – in terms of upfront information – and to tap into what, for example, the Land Registry is doing with its Digital Street project, and its ongoing digitisation of all records, to produce what we call a ‘Property Log Book’ that is – unsurprisingly – property-specific and would be available online with a series of required information that is updated and is always there, regardless of whether the property is up for sale or not.

That could, for instance, contain a Home Condition Report – which a member of the panel felt should be updated every decade, as is the requirement for the Energy Performance Certificate – another must-have in the Log Book. Clearly, with a leasehold, the Book should contain all pertinent information on its leasehold status and the terms of the lease, but we should also be thinking about the inclusion of planning permissions, building regulations, and the like, when work has been carried out. Warranty and guarantee information – in fact, everything you would expect a seller and agent to provide on the marketing of a property could be included, and its online nature would allow everyone interested to find that information and to peruse it and take advice on it to make sure they’re happy with its contents and the impact on their intended use and enjoyment of the property.

From a conveyancing point of view, we already have members highly engaged with certain estate agents in terms of having that information provided to them. We’re told that having that information can speed up the whole process by between 10-15%, and if everyone in the market was working along the same lines, with access to that information, we suspect the percentage benefits would be that much greater.

With the initial feedback from the ‘Call for Evidence’ due post-Easter we are convinced that the greater provision of upfront information in the form of a Property Log Book would deliver significant benefits. The noises coming from the MCLG are positive and it will be interesting to see how it sets out any delivery of this – especially given its aversion to HIPs. Our expectation is that it will be a major part of any future changes to the process, and the requirements on sellers and agents, and this will be a hugely positive step forward for us all, should this be delivered.

Beth Rudolf, Director of Delivery at the Conveyancing Association

Leave a Reply

Your email address will not be published. Required fields are marked *