Failed house purchases cost Britons £1.5bn a year due to ‘antiquated’ system
https://www.independent.co.uk/property/house-and-home/property/house-buying-selling-process-bank-santander-government-b2827707.html
Posted by tylerthe-theatre
Failed house purchases cost Britons £1.5bn a year due to ‘antiquated’ system
https://www.independent.co.uk/property/house-and-home/property/house-buying-selling-process-bank-santander-government-b2827707.html
Posted by tylerthe-theatre
34 Comments
I bought my first flat about a year ago and honestly, I never want to go through that process again!
Flats failing the survey, stress over making offers, dodgy estate agents trying to push their mortgage brokers, outright lying, sellers’ solicitors failing to do even the most basic work, and terrible communication.
Thankfully, my mortgage broker and solicitor were amazing, and I don’t imagine needing to upsize or move within the next 10 years or so.
A girl I was seeing, her mum living in the UK bought a flat in Poland practically over the phone in the space of a few weeks, the process cost pocket change.
Here it takes months and costs thousands. Even when it goes right…
Built by design. There’s so much money to be made in the house-buying process, there’s so many little hands out, that’s why it’s so slow and arduous.
It’s the mortgage companies not wanting the slightest bit of risk and the conveyance solicitors not wanting to be sued.
Which will never change because the government get a percentage of it.
England and Wales adopting Scotland’s conclusion of missives making the sale legally binding, which is earlier in the process than exchange of contract, which is when it becomes legally binding in UK, would be a positive step to remedying this.
That way legal work and finalising deeds can proceed with a far greater deal of certainty and avoids heartache and loss of money on buyer and/or seller side from parties pulling out late in the day.
When I bought my house I was astounded that *this* is how it’s done. Everyone wants their slice of the pie for seemingly minimal admin work that just exists for the sake of it, the whole process is so inefficient and difficult for no reason.
The government are well aware of the issues but don’t care, they are made up of lawyers and other professionals who benefit immensely from the shit system! We have a host of European systems to observe for improvement.
The current system is ridiculous, especially in a country otherwise known for the predictability of its contracts and legal system. Looking to begin moving process in next 6 months and I have to price in the contingency budget one effort to either buy or sell that falls through due to no fault of our own. Our last move, I got gazumped because a member of the bereaved family we were buying from persuaded the others to sell to a mate, at pain of threatening a big family fallout. Just total rubbish.
Why doesn’t England follow the Scottish process – the buyer puts their house up for sale and completes all surveys to show prospective buyers, buyer says yep I want to buy that house here’s my offer, seller accepts and bish bash bosh the sale is binding and complete in weeks.
The English system is an absolute car crash.
It’s a shambles and you pay through the nose for it and then stick stamp duty on etc. Gazumping should be a capital offence.
The core problem is that the process really was designed around the transfer of land on the Buyer Beware, freedom of contract philosophy. It falls to the buyer to ensure they are happy with all the facets of the purchase. Over time that understandably meant buyers wanted a survey since they were really buying a house, and at an ever increased cost. Local Authority Searches became a necessity, and the seller has to complete the Property Information Form on paper. That means all paperwork is linked to the buyer, rather than a seller having to do a survey and Property Information Form upfront, then make it available to all buyers (which a duty of strict honesty around surveys, and potential criminal penalities).
There was a previous attempt to bring in a Sellers Information Pack that would have contained all the information a potential buyer needed, but there was too much lobbying from estate agents, and mortgage brokers, so the govt of the day bottled it in favour of just the EPC.
What is needed is a National Conveyancing Case Management System run by GDS & a Govt dept, that is used by all parties to a conveyance. When a house goes on sale, the seller & their agent/solicitors would load onto the portal all the details like an EPC, all relevant property information (done on a case management portal, not a bloody PDF), and a full survey. This would then create a case for the Local Authority to add Search Data within 28 days. Once done, the house would have all relevant sale information in place. A buyer would then have to make an offer via the portal, and add their identity check documents, a financial statement, and the lender would be required to add the mortgage in principle documents within 48 hours.
This isn’t technically difficult, but it would be a massive govt capital project, and would require a decade of project work. The end result would be a fully digitised, end to end conveyancing system that was to GDS standards (like the govt website, passports, etc).
But since we are apparently “too broke for everything ever, except for some new nukes or a shareholder bail out” then you might as well get used to the broken, stressful system we have. Buy shares in online conveyancing firms maybe?
The number of emails I got from solicitors and everyone else in the chain who has their hands in your pockets, asking me for obscure details about things like boiler regulations, which I then had to google and answer for them, was ridiculous. Come the fuck on lads, you’re all being paid thousands here. Why I am I doing your job for you? Do your own fucking google searches at least. And that’s after you’ve gone through all the usual nonsense with shady estate agents trying to max out their slice of the action on both ends of the deal.
The whole process is a complete racket and deliberately made as Byzantine and convoluted as possible. It’s there for the picking if any government had the bottle to stand up to the vested interests, simplify the over-regulated bits and regulate the under-regulates bits.
It’s up to the buyer to do their due diligence on their house purchase and simply this will take time and it will cost money and sometimes something is identified which stops the sale. Or simply due to the whims of the seller they decide for whatever reason not to proceed. Or simply due to the wimps of the buyer they do the same.
That is completely efficient, even though it’s costing some amount of money. It will always be far better than any system that requires buyers spending money on time just to start advertising their sale.
It would do a very good job at stopping price discovery and many transactions simply would not start. It will cost more than the small price to pay for system we have.
My buyer’s mortgage offer expired and they pulled out. It had been going through the solicitors for six months at that point. It was my first house that I rented out after moving in with my partner. Unfortunately I can’t afford to sell it again, as it costs me hundreds in bills every month when empty, so it’s more cost effective to rent it out again. It’s mental, I just wanted to sell it so we could buy a bigger place together using the equity as my deposit. Instead, I’m thousands down in bills and solicitors fees.
Just sold my flat in London. No chain of custody on either side. Took 2 weeks for an offer, from initial listing, which we accepted. It took both myself and the buyer chasing our solicitors on a weekly basis to get an exchange of contracts in 4 months.
We now have a close date of 5 months after the initial offer.
Neither myself, nor the buyer could ever get a straight answer as to what was taking so long in the process, as again, their was no chain of custody, we had all the documentation since this was previously a new build, including land registry documents etc. Oh, and the buyer was pre-approved for the mortgage.
I’ve lived in 3 different countries and have friends and family with real estate all over the world, and none of us can understand what the hell is happening with real estate in the UK. In most first world countries, buying and selling property is a 4 to 6 week process. That’s from offer to close. Yes, this includes countries with heritage buildings, and other historical complications to manage and deal with.
If the government is serious about improving this countries productivity and economic circumstances, this is a very easy, low hanging problem they could resolve to help with this.
At this point, I don’t think I will ever buy real estate in England again. Absolutely bonkers process, with almost no transparency and accountability.
Why is putting a deposit down pretty much the final thing that happens, right before you’re about to “exchange” and finalise the house anyway? Does this happen in normal countries?
Makes no fucking sense.
I got fucked around for 5 months before my buyer pulled out for no reason, and there was zero consequences…
Change the system. Surely the only people it benefits are the surveyors and the solicitors.
In Spain, when you make an offer an amount gets put into escrow (or similar). Then if you pull out for no reason, you lose it. I think a lot of countries do the same, but England does not.
We had a deal fall apart when the woman we were buying from backed out. She was moving to a warden-controlled flat but got spooked by the service charge. We lost around £2,000 on the failed purchase, and because mortgage rates had gone up, our eventual mortgage is £150 a month more expensive, even though we found a house that was £10,000 cheaper.
My flat has been on the market since November and I’m unable to sell it feels like I’m going to be stuck with it.
Before I bought my current house. The previous one the owner decided not to sell just two weeks before completion and I had already notified my landlord, so me and my partner were temporarily homeless
I’m always surprised more isn’t done in this regard.
In countries like France you sign the contact early, and once its signed you’re committed to completing the buy on a given data in the future. There’s no backing out.
I don’t understand why our system exists and I don’t think anywhere else in the world has a system this shit but I’m willing to be corrected.
The fact you can spend upwards on 5k on various legal and professional services and then the seller can just change their mind is absolutely wild.
The concept of the ‘chain’ that might break just doesn’t exist in many countries. We just accept this and it’s bizarre.
7 months into trying to buy a simple flat. Think I’ll just live there till the end of time because wow it’s a miserable process. Slow, painful, expensive and full of rent-seeking incompetent parties.
Also, you know what’s shorter than 7 months? The 6 months mortgages are commonly valid for. Brilliant system guys…
In Scotland they changed the laws to tie in with English law relative to house purchases. I think this was within the last 10 to 15 years. It’s been a total chatastrafuck. People randomly pulling out of contracts right up to the day of handing over keys was not a thing.
Missives here used to be signed a few weeks after a purchase was agreed. Gazumping and all that rubbish did not happen. People who pulled out of such agreements were blacklisted by their solicitors. In short when you bought, you bought and when you sold, you sold. I spoke to a very well known solicitor in Glasgow about this recently and he agreed that the change from Scots Law has been an unmitigated disaster. I have absolute sympathy for people in the rest of the UK who are subjected to this legalised fraud.
Lobby your MPs to have the clocks turned back on this one.
A lazy property lawyer left me spending nearly a month in a hotel room. Wiped out the funds for fixing up the home.
Yep I know the feeling, £1200 down the drain because the seller decided at the last minute that he didn’t want to sell his house after all. All the surveys and legal work was done, just needed to exchange contracts.
It’s such a dogshit system. For a first world country we are backwards in so many ways.
Its absolutely rotten to the core. And even when you rent you can bet that the letting agents will try every trick in the book to run away with your deposit.
Its not the sole reason, but housing is one of the reasons in a list of very long reasons why I won’t be buying property in the country, and will rather bugger off elsewhere.
Failed house purchases make surveyors, financial advisors and conveyancers £1.5b a year extra in fees.
How can it be fixed though? This article and the report is basically pushing for the use of AI in all aspects of the trade.
The main issue I find with the process and it’s mostly on the buying side is that there’s a lot of uncertainty and need to purchase assurances or discovering hidden things around the property. The sky is the limit to how much a buyer requires to check before being somewhat comfortable to proceed. But at the same time, after paying for surveys etc, a buyer can find problems and cause more uncertainty which leads to the deal falling through.
They can call it antiquated and throw AI in it like it will solve the problems but the main issues is something I don’t believe AI can solve unless there’s a robot that can xray a property and give a full report to the buyer. Because at times there isn’t even enough data available for AI to come to a conclusion about things like drainpipes, subsidence etc without someone actually physically surveying. Based on what I seen with lender mortgage reports that utilitizes AI algorithms to estimate a property value all it is doing probably is pooling public databases and historical market data to provide a rough average regardless of the property condition.
Other than maybe landlords, if a seller that has no onward purchase, their only responsibility if you can even call it that is just find an EA to list their property. They can sprinkle and sweep the property however they like to present for photos and viewing but really they have 0 obligation to fully disclose anything in regards to property unless the buyer enquires. The estate agent does the bare minimum while sprinkling words enough to not be held accountable and provide half assed floor plans which are mostly inaccurate.
So while it can be seen as antiquated, having AI won’t solve anything. Every part of the checks has to be compartimentalise to avoid conflict of interest but my own belief would be that the EA should bare the cost of surveys. It astounds me how EA take a fat % of the sale when conveyancers take a fixed fee but do the actual legal and support in due diligence.
Currently trying to sell our 3 bed end of terrace and it’s been a total pain in the arse. We’ve reduced the price the 5k less than we bought it for 3 years ago and the only person who made an offer ghosted our estate agent after we accepted their offer. They did the money checks but then didn’t do the ID checks and went radio silent. A week after they ghosted they then tried to book a viewing with our estate agent on a different property using their wife’s name.
The big issue is that after we had an accepted offer we went to the property we wanted and had an offer accepted, and they went to where they wasn’t to go and an offer accepted. The whole chain collapsed and we’ve all gone back on the market as they need a buyer ASAP because they have already paid for surveys etc on where they want to go.
Honestly I wish in England we had a better system.
There must be a way to streamline:
– The money laundering checks
– Surverys
– Negotiations
– legal paperwork
They could also force everyone to use an app/website that clearly plots where each house sale is in its timeline to completion. That way you can see who and what is holding things up in a chain etc.
They should make gazumping illegal without having to buy out the person you accepted first of all their currently spent legal fees and survey fees etc.
Cost Britons…..but taken by the legal and professional sector
Binding contracts; a true MLS; transparent, immediate sold price data…it’s all possible and commonplace elsewhere in the world.