Reform: Backing for estate agent regulation
Stronger regulation of the “high-volume, low-value conveyancing sector”, as well as a review of fee structures, is needed as part of home-buying reform, the government has been told.
The call came among responses to the two Ministry of Housing, Communities and Local Government (MHCLG) consultations published last October – one dealing with the whole process and the other with material information for property listings.
CILEX said there was a need for regulatory action over high-volume, low-fee conveyancing practices, whose operational models placed lawyers under substantial pressures.
“CILEX has been made aware that this environment frequently results in inefficiencies and process bottlenecks that negatively affect conveyancing lawyers, and ultimately, poses risks to consumers buying and/or selling property.
“CILEX believes that a collaborative regulatory action is necessary to ensure that service quality and consumer protection is not compromised.”
A review of conveyancing fees should prevent firms from committing to “extremely high caseloads”, it added.
CILEX supported the mandatory provision of upfront information and digital logbooks, but said more work was required to “establish the practicalities” of binding offers “outside chain-free transactions”.
Backing the introduction of a code of practice for estate agents and mandatory training, CILEX called too for an urgent review of referral fees.
While agreeing with many of the proposals, such as more upfront information and digital property logbooks, the Conveyancing Association (CA) said it did not support the introduction of binding offers.
“While they would appear to provide certainty and reduce fall-throughs, until the provision of upfront information and mortgage instructions are settled, binding offers might not deliver the desired effect and even then, issues arise with the cost of instructing a conveyancing lawyer and surveyor to advise on the title and structure without knowing whether an offer will be accepted.”
The CA warned that many of the proposals, if done properly and at the right time, “will involve the conveyancer in separate and additional work. Not all of this will simply be moved from later to earlier in the transaction”.
It continued: “The best conveyancers will embrace this, seek out efficiencies, design out duplication and will benefit from a shorter title due diligence as a result of upfront information, but there will be additional work which should be properly costed.”
Mandatory and comprehensive upfront information, including mandatory search data and a ‘property condition report’ would be valuable, the CA said, calling also for a code of practice for estate agents to be mandatory rather than voluntary, with mandatory training too.
The Council for Licensed Conveyancers (CLC) also backed the MHCLG plans for mandatory upfront information and digital logbooks, and the use of binding offers “if they allowed for fair withdrawal”.
Not regulating estate agents to risked undermining the reforms, it said.
The CLC said material information upfront was “of fundamental importance to establishing a faster, smoother, more secure process that delivers greater confidence in the outcome”.
The Conveyancing Task Force, a group of conveyancers formed last year by the Property Lawyers Alliance to respond to the government’s home-buying reforms, said it “did not agree that the primary barriers to progress are technological, nor that a digital-first, uniform restructuring of the system will address the true causes of delay, cost, and consumer harm”.
Without statutory liability, digitalisation “moves risk towards consumers, not away from them” and that mandating data without mandating accountability exposed the government to “a repeat of past failures”, such as home information packs.
“Reform will only succeed if it addresses the causes of delay – not the symptoms,” it said, add: “The conveyancing system is not broken. It requires targeted, practitioner-led reform – not wholesale, tech-driven restructuring.”
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