The government has introduced changes to the home buying process which it claims will “stop sales falling through.”
And it says the reforms will also cut buying times by four weeks, save first-time buyers an average of £640 and get the housing market moving more quickly
Digitisation, the return of an upfront sales pack at the point of listing, and binding sales agreements are the key elements of the plan.
Agents and vendors must provide key information upfront in ‘sales packs’.
These will set out a home’s conditions, leasehold costs, and chain status so buyers can make better informed decisions.
There will also be a new earlier binding agreements “to stop parties walking away months into negotiations without a legitimate reason.”
In addition, there will be a new Code of Practice for estate agents alongside mandatory qualifications “which could ensure agents are properly equipped to support efficient transactions and rebuild trust in the sector.”
With the average home purchase taking around 120 days, one in three sales falling through costing sellers around £400 million per year, and failed transactions costing the economy up to £1.5 billion every year – these reforms will fix a broken system.
At the heart of the reforms is a major shift to digital, replacing paper-based systems.
Digital property logbooks and sales packs will allow information to be shared between professionals and accessed by buyers and sellers in real-time.
The government will also back digital identity checks, electronic signatures and AI-assisted conveyancing.
It says the aim is “to strip out duplication, reduce fraud risk and accelerate transactions from start to finish” and create “a modern, end-to-end system where people can track and progress their move more easily.”
The government announcement cites exemplars from overseas.
The Netherlands uses a live tracking system for buyers and sellers to check their transaction status helping to achieve a final completion time of 20 days on average, whilst Norway’s efforts to streamline and digitalise the system has estimated savings of up to £1.4 billion over 10 years.
The government announcement concludes: “This package will inject fresh momentum into the housing market and help people keep more money in their pockets by cutting the hidden costs and delays in buying a home to ease cost of living pressures.”
The government has given a broad timeline for the changes.
And…
This article is taken from Landlord Today