The introduction of binding offers, backed by widespread use of artificial intelligence (AI), holds the key to improving the conveyancing process, the co-chair of the Home Buying and Selling Group (HBSG) has predicted.
Beth Rudolf, who is also the director of delivery at the Conveyancing Association, said AI would have an essential role in selecting relevant information for buyers from upfront information provided by sellers.
“Upfront information and binding offers mean everyone knows what is expected of them. A load of AI will be deployed to help buyers see if a property ticks the boxes and whether lenders will lend on it.”
Ms Rudolf said that, if she had a “magic wand” to make changes to the conveyancing in England and Wales, it would be the use of binding offers similar to the Norwegian system, where they are followed by a brief cooling-off period.
She was speaking to Mike Harlow, deputy chief executive at HM Land Registry (HMLR), in the first of a new podcast series launched to coincide with the creation of the Digital Property Market Steering Group earlier this month.
The group – which includes HMLR, the Conveyancing Association and Law Society among others – aims to create a “simpler, faster, more certain and less stressful” conveyancing process through collaboration, innovation and a focus on technology.
Ms Rudolf described the current process, with its average transaction time of 22 weeks and 34% failure rate, as “horribly uncertain”.
She said a further problem was the departure post-Covid of “lots of experienced staff” from conveyancing, leaving trainees behind, who “need somebody to chat to and ask ‘is it alright?’”
But working from home made it more difficult for trainees to walk into a senior partner’s room and get the answers they needed.
To make things worse, “huge issues” such as cladding and building safety or rapidly escalating ground rents had made it harder for some people to get mortgages.
Meanwhile, reservation agreements, under which parties would pay a ‘commitment deposit’, had not got off the ground because the Ministry of Housing, Communities and Local Government did not see how they could work without upfront information.
Ms Rudolf said government researchers did not even want to pilot reservation agreements because of the risk that, without upfront information, they would “upset the market”.
However, she said consumer legislation was paving the way for a conveyancing system where sellers were legally obliged to provide upfront information.
“By gathering information upfront solicitors can identify issues that might prevent clients from selling on the open market.”
If the upfront information was digital, then AI could be used to make summaries, sorting out what was “truly relevant” for each buyer.
Ms Rudolf said AI could already be used with the HBSG’s 200-question Buying and Selling Property Information (BASPI) form, so that people only answered questions relevant to their property.
She said some conveyancers feared that if too much information was provided upfront, it might increase their exposure to professional indemnity insurance claims.
However, she had spoken to one of the largest insurers, which had assured her that the BASPI would have the opposite effect, by enabling solicitors to evidence that buyers had certain information before they put in their offers.
She added that if conveyancing data was provided to buyers upfront and digitally, it would make a “huge difference” to the process.