Conveyancing process requires substantial overhaul, CILEX says

Buying and selling a property in England is “inefficient and ineffective” and the process needs “substantial reform”, according to CILEX.

Responding in April to a call for evidence by the Levelling up, Housing and Communities Committee inquiry into buying and selling homes, CILEX said that sellers should have to provide ‘material information’ about their properties “at the earliest possible stage” and that the government should consider introducing “an auction-style pack… where potential buyers can view and search title and accompanying documents when viewing the property”.

New legislation should be introduced, rather than allowing for voluntary change across the industry, as this, CILEX said, “provides the best opportunity to create improvements to the home-buying and selling process”.

Whether or not to mandate any change is a long-running debate in the market. CILEX said that the risk of relying on voluntary initiatives was the piecemeal adoption of digitalisation, “resulting in inconsistencies and confusion across the industry, and for consumers”.

A survey of CILEX members working in conveyancing found 53% thought the current process was inefficient and 81% said the amount of work that goes into buying or selling a house had increased over the past two years.

CILEX said that more could be done to reduce the stress of buying a house and that having sellers provide material information early is “crucial”. Only 26% of members believed that buyers had the right information at the right time during transactions.

The response argued that the government had failed in its pledge in the 2017 ‘levelling up’ white paper to “ensure the critical information buyers need to know is available digitally wherever possible”.

To help with the swift flow of information between parties during a transaction, CILEX said “a codified system for the digitisation of information” should be introduced across the industry to ensure “harmonisation and cohesion”.

Regulating managing agents in the leasehold process or changing the process for accessing leasehold information would also improve the process, CILEX said, while supporting mandatory qualifications for, and regulation of, estate agents.

CILEX recognised that the suggested changes around sellers needing to provide more information would increase the amount of work estate agents do before a property is marketed and that lawyers would need to be instructed earlier, raising costs, but concluded: “Financial negatives borne by the seller, and in some cases passed onto the buyer, are likely to be outweighed by the substantial savings in other elements of the transactions – e.g. the reduction in the number of withdrawals, and also the conveyancing process. Ultimately it will also allow the buyer to make more informed choices about properties and to purchase the correct property for them.”

Then CILEX president Emma Davies said the sector needed to collaborate to ensure clients, conveyancers, lenders, surveyors, property agents and estate agents work together and that this needs to be complemented by government mandating this where appropriate.

“A lack of mandatory measures for a digital ID framework or qualified e-signatures in the home buying and selling process has been a major barrier to its adoption across the industry,” she explained. “This is therefore an example and aspect of the home buying and selling process where digitisation would make a difference but has not been driven through mandatory measures.”

The committee’s inquiry was cut short by the election being called but MPs are likely to return to the issue in the next Parliament.