Rudolf: Vendor disclosure is key
Transaction times will get “longer and longer” regardless of “how many new houses you build” because of the number of conveyancers leaving the market, MPs were told this week.
Speaking to the House of Commons’ housing, communities and local government committee as part of its inquiry into the affordability of home ownership, Joe Pepper, the UK chief executive of digital property exchange PEXA, said: “I have a genuine concern about the capacity of the conveyancing market going forward because we have seen 15% of conveyancers leaving the market in the last two years.”
A PEXA survey three years ago suggested that 30% of conveyancers in England and Wales wanted to leave the market in the next five years.
This was partly because the job of a conveyancer had become “far more complicated and time consuming” and it was “simply not” what people expected it to be, he explained.
“I think we will get to a point in the next five to six years where unless we change the way people convey property in this country, it doesn’t matter how many new houses you build, the length of time to transact will get longer and longer.”
Mr Pepper said that instead of taking an average of five months from offer to completion, as it did here, the average transaction time in Australia was 30 days.
PEXA began life in Australia and processes around nine out of 10 conveyancing transactions there.
The PEXA platform could manage movements of money at the Bank of England and lodge interests at HM Land Registry, which he said “massively reduces the flow of money through the system and massively reduces the potential for fraud and errors” which cost the industry “vast sums” of money.
However, Beth Rudolf, co-chair of the Home Buying and Selling Council, said the “real difference” with Australia was ‘vendor disclosure’, where sellers had to put all their information on the table so buyers could put in a binding offer – a feature of the current government consultation on reforming home-buying and selling.
Ms Rudolf said the provision of upfront information could cut transaction times to between five and seven weeks.
However, “with chains of transactions you can only go as fast as the slowest person”, so unless there was some legislative commitment from the government which was enforced, “you are not going to get that improvement across the whole of the country”.
Ms Rudolf said National Trading Standards was responsible for enforcement of material information requirements, but it had “no resources”, which meant there was “not a level playing field” for estate agents.
The conveyancing market needed “quick wins”, and “digital ID was the key one” because it reduced fraud and could cut indemnity insurance premiums.
She added that mortgage lenders were digitising their handbooks, but “were talking about charging conveyancers” to access them.
“Unfortunately conveyancers don’t get paid by the lenders to act for them, so we could see more conveyancers leaving the market.”
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