Reservation agreements and the need for more upfront information

The old saying about a week being a long time in politics is clearly relevant at the moment, so to look back over the last 18 months in terms of the home buying and selling process is somewhat problematic simply because there has been so much going on, with progress made across a large number of areas. 

Plus of course we have had the not-so-small matter of there now being a new Prime Minister in Downing Street, plus the personnel changes that have come as a result, with a new Secretary of State and Housing Minister as a result of the recent reshuffle. 

However, in the last year and a half, the Government, Select Committees, Law Commission and Regulation of Property Agents (ROPA) Working Group have all undertaken consultations and call for evidence projects designed to look at the issues impacting the home moving process, and to come up with a variety of solutions to various problems that are regularly encountered. 

During that time, the Home Buying and Selling Group (HBSG) – which has been set up by Kate Faulkner and includes the CA – has been providing the Ministry for Housing, Communities & Local Government (MHCLG) with feedback from 100 stakeholders involved in the industry and considering just how to practically deliver on the solutions suggested in the Government’s response to its own Call for Evidence. 

As part of that, Home Buying and Selling Guides have been published for the consumer and an industry-approved standard wording for Reservation Agreements is being reviewed by the behavioural insight researcher, Kantar, who were appointed by the Government to see how Reservation Agreements would impact the process, ahead of a pilot, which is to take place later in the year.

Overall, the Reservation Agreement would have to be conditional upon the supply of information which does not currently bode well for the consumer. The upfront provision of information is therefore key in improving the whole process and the working party within HBSG believes that this could be the ‘Trojan horse’ to providing the consumer with what they desperately want – namely transparency, certainty and to be able to interact with the process using technology.

Imagine therefore being able to obtain a digital summary of the relevant legal and financial points prior to viewing or valuation and having all of the due diligence data available prior to offer? Imagine a seller being able to complete an interactive digital form which does not display questions about septic tanks for a property which is on mains drainage. Imagine a set of information which could be verified by the relevant authority and provide the single source of truth through the whole process, accessible to both buyer and seller and their conveyancers, valuers and lenders, and capable of importing into case management systems to reduce claims, improve advice and reduce additional enquiries and post-valuation queries. 

What about a digital summary, signed digitally and supported by biometric identity verification for the seller to establish that they own that identity and that it is the identity of the registered proprietor? How far would this go in terms of eradicating seller impersonation fraud and reducing claims, which in turn would reduce insurance premiums that have currently reached an eyewatering high this year thanks to several big claims. That is all possible and would create a significant improvement across the entire process for all stakeholders.

As I write, the NAEA PropertyMark Transaction Reform Group are also busy working on a standardised memorandum of sale which will ensure that the correct information is available to all parties. Crucially this involves chain information. We know that by far the biggest improvement to customer satisfaction on the underground rail network, for example, is not necessarily more trains, less crowding or even trains arriving on time, it is ensuring the dot-matrix signs on the platforms, which tell you how long your train is going to be, work properly. Human beings are hard-wired to see more value in knowing their true position rather than the speed of service and that’s exactly the case in the conveyancing process. 

Providing chain data will therefore be vital to improving the lot of the home mover whether they receive that manually via the estate agent or through products like mio and ViewMyChain which can provide this transparency. This will be important not just for managing customer expectation but also for conveyancers managing their workloads to ensure they can work efficiently and are not wasting time or client money working on transactions which have an incomplete chain.

These are just some of the linked initiatives that have been progressed over the past 18 months and, I have no doubt, that with continued commitment and ongoing industry collaboration, these will continue to blossom in the months ahead, and will eventually bring a vast improvement to the home-moving process for all those involved. 

Beth Rudolf is Director of Delivery at the Conveyancing Association (CA)

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