On 6 April 2018 new Land Registry rules enabled H M Land Registry to start accepting digital conveyancing documents starting with digital mortgage deeds to enable fast and efficient re-mortgaging. The stated intention is to progress to other conveyancing documents such as digital leases in due course.
On 08 April 2018, the Housing Secretary, Sajid Javid announced measures to professionalise estate agents and also to improve the current home buying process.
Both announcements are significant and are intended to result in a faster, technology-driven home buying process which will place significance on price transparency and pre-agreed timescales.
Referral Fee Transparency
As well as the requirement for estate agents to hold professional qualifications the government announced greater transparency on referral fees which are paid to estate agents by solicitors, surveyors and mortgage brokers.
Although solicitors and estate agents are already obliged to make disclosure of referral fees, it is likely that the government will seek full disclosure and informed consent to the arrangements in advance of any transaction. With approximately half of all conveyancing transactions subject to a referral fee, the impact on estate agents might be significant if consumers became more likely to instruct conveyancers directly.
The government’s announcement follows work undertaken by the Competition and Markets Authority which is likely to be adopted by other regulators including the Solicitors Regulation Authority and the Council of Licensed Conveyancers regarding fee transparency and the use of price comparison websites.
Following today’s publication from the Ministry of Housing, Communities and Local Government it is still possible that referral fees will be banned entirely in conveyancing transactions. A call for evidence was split on whether such a ban would be beneficial or might cause further delays in the process.
Faster Local Authority Searches
This proposal includes setting a timeline for local authority searches so buyers get the information they need within 10 days.
It is not yet clear who will be responsible for the provision of the searches within this timescale and whether this would be undertaken by personal search companies or the local authorities themselves.
Leasehold Management Information
A much-welcomed measure will be the proposal that managing agents and freeholders are to provide up to date leasehold information for a set fee and to an agreed timescale. Hopefully, this will end the current situation where leaseholders are at the mercy of freeholders and their agents with regard to the fees charged for management information with no particular timescale for a response.
Voluntary Reservation Agreements
This proposal includes the idea of encouraging the use of voluntary reservation agreements to help prevent sales fall through and a crackdown on gazumping.
HM Land Registry will also continue to be a significant factor in these reforms as it continues to develop its digital and search offering.
The details in the press release are vague but there is momentum building in the development of a very different looking home buying process.
Should you require any further information, please do not hesitate to contact Bill Dhariwal by e-mail: email@example.com or DDI: 01489 864 117.