The government consultation on Improving the Home Buying and Selling process has called a lot of our industry processes into question and prompted the need for real change – as evidenced by the recent summary of responses issued by the Ministry of Housing, Communities & Local Government (MHCLG) in response to the government’s Call for Evidence late last year.
Here tmgroup share their predictions for what may lie ahead – alongside expert commentary from Bold Legal Group Founder, Rob Hailstone, and tmgroup’s new CEO, Joe Pepper.
Consumers will demand visibility across the entire property chain
The information tied up in a property transaction is often only shared across disparate emails and telephone conversations, which can result in delays and confusion for those involved – especially the consumer.
With poor communication already being blamed by all parties involved for property transactions falling through, and other sectors (including banking) providing improved visibility and control through self-service apps, consumers will inevitably come to expect more from their conveyancers and estate agents.
…And PropTech will enable collaboration and transparency
Fortunately, the market is already rising to the challenge, with practical solutions for providing transparency across the entire property chain already being piloted, such as tmgroup’s mio solution.
By sharing data across the property chain, everyone involved will benefit from a single view of the transaction, from seeing how long the chain is, to identifying (and chasing) whoever is contributing to creating delays.
Consumers will also be able to keep an eye on any updates using an app, giving conveyancers and estate agents more time back in their day to progress the transaction – instead of fielding questions from anxious homemovers.
PropTech solutions – such as tmgroup’s mio solution – will also help to create greater transparency, as well as educate consumers, so they feel more empowered, informed and have a better experience.
Blockchain will make property transactions faster and safer
Cyber crime, fraud and money laundering will continue to challenge the property sector – but Blockchain technology will play a key role in making transactions faster as well as safer.
ID verification is an area where Blockchain technology could really excel. By creating a centralised system of authentication, for example, everyone in the property chain could have access to the same, secure information – from scanned passports to AML checks.
Joe Pepper, Chief Executive Officer (CEO) at tmgroup comments:
“Whilst at Propteq Europe 2018, I heard many innovative ideas about what the future may hold for the property sector. Yet I think it is equally exciting to ask ourselves what technology can achieve tomorrow – not in 2028 – and how today’s business community can help to shape these ideas into practical solutions.
Blockchain is a great example of making the most of today’s capabilities. We are already seeing blockchain-supported cryptocurrencies hitting the headlines – with some people even using them to purchase property. As we all progress towards a safer, more efficient home buying and selling process, I expect blockchain technology will play an increasingly dominant role.”
Creating a pre-sale report will become the norm – and be quick and easy with the help of technology
As steps are taken to improve the home buying and selling process, there will be increased focus on what can be done to make the property “sale ready” before it goes on the market.
A pre-sale report is one possible solution. Echoing back to Home Information Packs (HIPs), these are unlikely to be everyone’s first choice, but could have the potential to reduce the time spent gathering information whilst the transaction is in progress.
Rob Hailstone, Founder of the Bold Legal Group comments:
“When the property is on the market, this is the ideal time for preparation – especially as this is typically at least 3 months. The creation of a pre-sale report will help to ensure that every property is presented openly to potential buyers – and that there will be no nasty surprises later on.
The challenge will be in managing the time and cost of generating this report, so that they are welcomed by estate agents and don’t unintentionally prohibit the sale of the property by adding additional costs and delays to the home selling process.”
The latest technology offers time-saving possibilities for pre-sale reports
Thankfully, technology has moved on a lot since Home Information Packs (HIPs) were abandoned in 2010, offering great potential for smarter and faster pre-sale reports that benefit everyone.
• Could a digital pre-sale report be generated at the click of a button?
• Could the conveyancer, estate agent and seller have a single live view of the report that could be easily shared with potential buyers?
• Could a quick scan of available data sources highlight where there may be need for further investigation? Or give a property “the green light”?
Searches will be ordered much earlier on in the process
Searches have a reputation for delaying the property transaction, as they are typically ordered later on in the homebuying process – and can create complications when issues need to be resolved before the sale can progress.
It therefore stands to reason that if searches are ordered sooner and reviewed in a more timely fashion, then any issues could be identified earlier – reducing the likelihood of “surprises” hindering the progress of a transaction.
If pre-sale reports do harness the potential of technology and quickly become the norm, search results could be generated as part of the report – helping the buyer to make an informed decision about any known risks when putting in an offer (instead of getting a surprise later on that could compromise the sale and the entire property chain).
New initiatives to help improve the turnaround times of search reports could also help to speed up the home buying and selling process – such as the Government’s recent announcement to “set a timeline for local authority searches, so buyers get the information they need within 10 days”.
…and digital property log books will be used to store planning permission applications and other useful documents
When a property transaction is completed, conveyancers are typically left with a bundle of documents (mortgage guarantees, planning permission applications, etc.), which would be useful in a future sale. However this information is typically sent to the homemover and can be lost over the years.
A digital property log book could be the answer, allowing important documents to be scanned if necessary (or even photographed), saved and stored. When the property is sold on again, homemovers can simply give their conveyancer permissions to the log book, so they can retrieve the relevant documents to proceed the transaction.
This will accompany any information generated by a pre-sale report and help to ensure the house is “sale ready” when it goes on the market, as well as reduce the time spent requesting copies of original documents.
Rob Hailstone, Founder of the Bold Legal Group comments:
“Some companies are already experimenting with the concept of digital property log books. However, the main challenge will be selling it to the consumer.
Whilst registration fees are expected to be minimal – around £30 to register the property and £10 per year to keep the documents stored – additional features such as holding copies of passports and driving licenses could help to improve uptake.”
Having a mortgage in principle will be mandatory
A prospective buyer presenting a mortgage in principle is currently best practice – and not mandatory.
Whilst a good idea in theory, helping to determine how much lending power homebuyers really have when they put an offer on a property, some estate agents don’t ask to see one. This can cause problems further down the line – resulting in delays or even withdrawals of the offer due to lack of adequate funds.
If the presentation of a mortgage in principle was made mandatory, it would help to ensure that every offer made on a property is genuinely backed by a lender.
With funds better secured, it is also more likely that the Government’s recent proposal for voluntary reservation agreements will succeed, by removing some of the financial risk that can contribute to buyers pulling out and chains collapsing.
Such reservation agreements echo the process in place in the Scottish property market, where homemovers are tied in once they have made an offer – resulting in a significantly lower fall-through rates.
What do you think will happen?