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Viv Williams

Consultant, Viv Williams Consulting

Conveyancing: A whole 'new approach?

Conveyancing: A whole 'new approach?


Any government initiative examining the home-buying process must look at the use of workflows and technology to speed up transactions and reduce risk, writes Viv Williams

The government is
to publish a 'call for evidence' later this year to modernise the home-buying experience amid concerns about conveyancing. Justice minister Dominic Raab confirmed that the government is concerned that the current system of purchasing and selling houses needs to change.

I recently moved house,
and despite a relatively quick purchase and sale with no chains on either side, it was one of the most stressful experiences I can ever remember.

Due to alleged incompetence on behalf of our purchaser's conveyancers, we eventually exchanged contracts at 3pm on Thursday, with completion the following day. An array of other parties, removers, and my own family were getting extremely stressed. There must be a
better way.

My purchaser had used a cheap 'bucket shop' organisation that obviously did not have the necessary systems and people
to handle volume. To quote my purchaser, 'I will never use such an organisation again'. Too late!

HIPs disaster

The investment by many firms
in home information packs (HIPs), which were intended to streamline the process, was an unmitigated disaster and cost many businesses a significant sum of money. Raab mentioned the 'ill-fated' HIPs introduced in 2007 and stated that any change to legislation should involve consultation with the estate agent industry and legal profession to ensure changes
are beneficial to the process.

We must remember the estate agent has a vested interest in keeping things just the way
they are, particularly those that accept a referral fee from the conveyancing firm. In addition, an agent generally receives 1 to 1.5 per cent of the value of the property as their fee, yet a solicitor receives a fraction of that for much of the risk in processing the transaction and could also be paying a referral fee.

The professional indemnity insurers are very concerned when the proportion of a firm's turnover generated from conveyancing is less than 20 per cent. These firms are considered hobbyists, whereas a firm that has 80 per cent of its turnover from conveyancing is considered a specialist.

The controversial HIPs
were scrapped in 2010. The government said at the time they were 'holding back the housing market because sellers are having to fork out extra cash, sometimes hundreds of pounds, just to be able to put their home up for sale'; it was suggested that suspending them would also 'remove a layer of regulation from the process'. I trust this initiative does not have 'HIPs 2' written all over it.

Standardised procedures

It would certainly help matters
if all lenders had similar requirements and the Council
of Mortgage Lenders' handbook could be standardised for
most lenders.

An agreement to standardise protocols and procedures
would also help, but there are
so many issues that individual conveyancers can currently 'take a view' on - for example, when
a copy of planning permission
or building regulation approval should be requested and provided, when a legal indemnity policy is or is
not required, and so on.

Collecting some useful information while a property
is being marketed would seem sensible, and although HIPs weren't the solution the government had hoped for, perhaps they should not have been scrapped overnight.

Without doubt, the way managing agents and freeholders provide information should be standardised, sped
up, and, in most cases, made cheaper.

Low fees and high volumes without the correct processes can lead to frustration and delays; gazumping and withdrawals also have an impact on the process and even bring professional indemnity claims onto the agenda. However, it is not only volume conveyancers that cause delays, but also a large number of high-street firms that have not invested
in technology and continue
to process matters in a very old-fashioned way.

Privatising the Land Registry seems a bad move for the process and will only complicate, not simplify, any transaction.
Any government policy should not be directed purely at making conveyancing cheaper but
at utilising workflows and technology to both de-skill the process and, more importantly, de-risk the transaction.

Following my own experience, I welcome this initiative if
it eventually results in a conveyancing/home-buying and selling process that is better for all concerned and becomes significantly less stressful.
I believe you get what you pay
for, but for anyone to improve the conveyancing process, the use of workflows will enhance the process and reduce the risk - a necessity of any government initiative.

Viv Williams is a director at SIFA @SIFA_News