Improving the home buying and selling process
The government has published proposals to reform the residential conveyancing system. This is in response to consumer concerns that the process is slow, expensive and stressful.
Consumer guides
In May 2019, the government released guides outlining what consumers should expect at each stage of the home buying and selling process:
The government is considering how these guides should be distributed to make sure all potential buyers and sellers have the information they need.
Reservation agreements
A reservation agreement is an agreement between a buyer and seller signalling that they plan to go ahead with the sale. If either drops out before exchange of contracts, one must pay compensation to the other.
The government plans to:
- work with conveyancers to develop and pilot a standard reservation agreement
- commission research into encouraging buyers and sellers to use the agreements
The government hopes that a short standard reservation agreement will reduce the rate of failed transactions by:
- encouraging buyers and sellers to commit earlier in the process
- deterring the seller from accepting a higher offer (gazumping)
Quality standards for conveyancers
Consumers often find their conveyancer through recommendations from friends and family or referrals from estate agents.
The government wants to improve price and service transparency to allow consumers to make a more informed choice. It plans to work with conveyancers and consumers to create:
- kite marks and quality standards
- standard data – to help consumers compare the prices and services on offer
Leasehold information
Leasehold property sales can take longer to complete than freehold sales. This is usually because of delays in getting property information from the freeholder or managing agent.
The government plans to:
- encourage consumers to collect information before marketing their home
- set fixed time frames and maximum fees for freeholders and agents gathering leasehold information (possibly using new legislation)
- encourage managing agents to publish information electronically
- standardise the leasehold information form
Responses to searches
Local authorities can take weeks to respond to solicitors’ search enquiries. This slows down the process and can cause delays to completion.
The government plans to:
- inform local authorities that they should respond within 10 working days of an enquiry
- act against authorities that do not meet expected performance levels
Regulation of estate agents
Estate agents are regulated by the National Trading Standards Estate and Lettings Agency Team (NTSELAT). No professional qualification is currently needed to work as an estate agent.
The government plans to:
- work with the NTSELAT to enforce the existing regulations
- consult on creating a professional qualification for estate agents
Reporting of referral fees
Conveyancers and mortgage lenders often pay referral fees to estate agents in exchange for referring business.
The government is concerned that referrals may prevent consumers from making informed choices. It plans to:
- work with industry to standardise how referral fees are displayed to consumers
- investigate whether to ban referral fees
The NTSELAT submitted a report to government recommending mandatory disclosure of referral fees by property agents.
Our view
We broadly support the government’s proposals.
Over a quarter of property sales fail every year. We believe the proposals could make the home buying and selling process more open, transparent and efficient.
When implementing the changes, the government should focus on:
- reducing wasted costs and delay
- promoting trust between buyers and sellers
- reducing the failure rate of transactions
Before making any changes to legislation, the government should consult with industry and carry out impact assessments to prevent damage to the conveyancing system.
We updated our Conveyancing Protocol to encourage conveyancing solicitors to:
- share more information with clients and lenders
- follow an efficient timetable
Read the call for evidence on improving the home buying and selling process and the government’s response.
In March 2021, we launched a pilot extension to the TA6 Property information form that aims to make key information for home buyers and sellers available at the point before listing.
Until now, the TA6 information was only collated post-offer, after a solicitor has been instructed.
Working with InfoTrack and Perfect Portal, we’ve identified key early marketing questions that can be completed by agents at the point of marketing in what will be known as the TA6 Part 1.
The aim of our pilot is to assess the extent to which the answers to the questions in the TA6 Part 1 help to inform a buyer’s decision to purchase a property.
The pilot will support industry-wide initiatives to begin the systemic collection of up-front information about a property.
What this means for solicitors
The government has said it will work with industry to make incremental changes to the home buying and selling process. No new legislation is planned so far.
The proposed changes should simplify current practices and improve the consumer experience. We expect any changes to the process will be fairly easy for solicitors to implement.
What we're doing
- June 2021 – we responded to the National Trading Standards survey on improving material information on property listings
- March 2021 – we launched a pilot TA6 Part 1 form, working with InfoTrack and Perfect Portal, which estate agents can complete with answers to key early marketing questions at a much earlier stage in a transaction
- October 2020 – we reported on NTSELAT's recommendations that disclosure of referral fees should be made mandatory
- July 2019 – we updated our Conveyancing Protocol following our consultation and published consumer guides on buying a home and selling a home
- May 2019 – we welcomed the government’s publication of guides to help consumers navigate the home buying and selling process
- April 2018 – we consulted on amending our Conveyancing Protocol to take the government’s proposals into account
- December 2017 – we responded to the government’s call for evidence to give our views on the government’s reform proposals
- October 2017 – we welcomed the government’s call for evidence on improving the home buying and selling process