There’s no shortage of changes and trends to keep an eye on in 2018.
Here are 10 things you will definitely hear more about in the months ahead:
2017 gave us all a peek into the future of property transactions, after a property in Wiltshire was claimed to be the first to be digitally exchanged online and moved instantly to a live blockchain. Impressively, progressing from initial marketing advert to a verified online exchange in just seven days.
As the industry continues to experiment with this potentially-revolutionary technology, we’ll hear even more about blockchain in 2018 – for better or for worse.
[If you haven’t’ already read the “Blockchain: Buying a Property in 60 seconds…” article from John Danahy, Partner at Squire Patton Boggs LLP, we suggest you take a look.]
Despite progressing into the second phase of negotiations with the European Union, Brexit will continue to be a point of uncertainty in 2018 and pull us all into another challenging year in the property market.
It is already making its mark on the property market, with predictions that London property prices could fall by another 2% in 2018. So, unless you’re planning on moving to Frankfurt to cash in on the increase in commercial property transactions (thanks to US and Japanese businesses), it’s time to hunker down.
3. Mining risks and mortgage refusals
Mining risks and sinkholes repeatedly made the headlines in 2017, with some lenders refusing to secure mortgages against properties in close proximity to mineshafts. This has put conveyancers under increasing pressure to understand the mining risks in their local area.
Are you making assumptions about your local mining risks? According to recent research, a third of conveyancers are dramatically underestimating the prevalence of non-coal mining risks across the UK – raising concerns that hazards are being overlooked.
4. The Bank of England’s Rate Rise
When The Bank of England raised its rates for the first time in 10 years from 0.25% to 0.5%, it was a shock to many home movers – especially those who’d never experienced a rise in their mortgage interest rates.
From experiencing the impact of the 2017 rate rise, to speculating about the date of the next one, there will certainly be plenty to talk about in the New Year.
…And when will we next see a move from the Bank of England? Well, initial speculation has coined August 2018.
5. Improvements to the home buying and selling process?
With the initial findings expected to be published in January 2018, The Call for Evidence is likely to kick-start some interesting debate about how the property transaction could be cheaper, faster and less stressful.
Some controversial ideas have already been suggested, from challenging the role of estate agents in making sure every home is ‘sale ready’ and even bringing each chain under the control of one conveyancer. Yet the one thing we can all agree on is that we must find a way to reduce the 20%-30% failure rate of all property transactions – for everyone’s benefit.
6. Stamp Duty Land Tax (SDLT)
Changes to Stamp Duty Land Tax (SDLT) can be very disruptive, so make sure you’re prepared for…
• Land Transaction Tax (LTT) replacing SDLT in Wales on 1st April 2018
From 1st April 2018, Land Transaction Tax (LTT) will replace Stamp Duty Land Tax (SDLT) in Wales. Mostly consistent with SDLT, LTT even includes the higher rates of SDLT on second homes that came into effect in April 2016. The new process echoes the Scottish introduction of land and buildings transaction tax (LBTT) in 2015.
How will it affect you? Not only will conveyancers need to apply LTT fees to properties in Wales, but will need to make a conscious effort to correctly process land tax for properties that straddle the border of England and Wales.
• The SDLT filing and payment window reducing to 14 days
Following a consultation in summer 2016, the government has committed to reduce the SDLT filing and payment window from 30 days to 14 days.
In response to concerns about the filing limit however, the introduction has been delayed from 2017-18 to 2018-19. There’s no need to worry yet – the exact commencement date will be communicated well ahead of time. Click here for more information.
• The impact of the abolishing SDLT for First Time Buyers
The abolishment of Stamp Duty Land Tax for First Time Buyers – as announced in The Budget – was a good intentioned move to benefit approximately 80% of first-time buyers purchasing properties worth up to £300,000.
Whilst a great idea in principle, it only makes a small dent in the somewhat larger problem of saving up for a deposit. As 2018 takes hold, we will begin to see whether this new initiative has had any impact on helping First Time Buyers onto the property ladder.
7. General Data Protection Regulations (GDPR)
Are you ready for 25th May 2018? If you didn’t know already, this is the date that the new General Data Protection Regulations (GDPR) come into effect, bringing a whole host of protective measures for our personal data.
This will have a noticeable impact on how firms market their services, as well as how they store client and employee data – and time is running out for businesses to prepare. Proactive first steps include understanding exactly what data you hold in your firm and the processes involved in collecting, using, storing and destroying it… Have you started yet?
8. Cyber crime and fraud
Cases of cyber crime and fraud have continued to plague firms across the year – and there is no sign of this easing off in 2018.
According to our own research, over half of conveyancers relied on unsecured emails to communicate sensitive information to their clients in 2017 – leaving clients vulnerable to Friday Afternoon Fraud.
What information are you giving your clients about cyber crime? Are you communicating safely? Could you be doing more to protect every property transaction? Knowing the answers to these questions is key to maintaining resilience.
9. Artificial Intelligence (AI)
While we may never see robots carrying out end-to-property transactions, we’re already seeing examples of digitisation in the market, which are shedding new light on the potential of Artificial Intelligence (AI).
From online SDLT submission to the digitisation of the Land Registry data, an increasing number of services are moving away from traditional paper methods to help improve workflows and drive new levels of efficiency.
With potential to save even more time for conveyancers, it is highly likely that these services will continue to evolve across 2018. Is it only a matter of time until some of these processes are automated too?
10. Consumer transparency
Due to the discrepancies between fees paid and quality of service (with little consumer awareness of what the average is), The Competition and Markets Authority (CMA) has launched a ‘Policy consultation on transparency’.
Set to close on 5th January 2018, we’ll hear increasingly more about transparency as the rules consultation in March and the new rules coming into force by the end of the year.
For those committed to quality service, a shift towards greater visibility should be seen as an opportunity to thrive, with positive ratings promoting your services to new business prospects.
Simon Wood, Sales Director at tmgroup comments:
“The industry is set to change rapidly across 2018. Whilst Brexit and the possibility of another rate rise will continue to bring uncertainty to the property market, it is exciting to see plans in motion to make conveyancing quicker and easier for everyone involved in the transaction.”