House buying is to be modernised to prevent thousands of transactions from falling through, the Government has announced.
The Ministry of Housing, Communities and Local Government has unveiled plans for a fully digitised home buying process that would give conveyancers and lenders clear information and hopefully stop chains from collapsing.
Around one million property transactions take place each year – however an estimated 300,000 fall through.
This can be for a number of reasons such as financial problems but is sometimes due to issues revealed late in the conveyancing process.
The failed transactions cost sellers around £400m annually, while conveyancers and estate agents lose four million working days – the equivalent of £1bn.
The Government has now launched a 12-week project to identify how data could be more easily shared between the key parties involved in a property transaction.
In addition, HM Land Registry will lead 10-month pilots with some councils to investigate how data required for property transactions can be digitised and accessed more quickly.
Currently some information required for completion is predominantly paper-based – such as details about building control, which ensure a property has been built to legal standards.
There are no established rules for accessing and sharing this information which can lead to lengthy delays.
The reforms also include plans to modernise identity verification so buyers and sellers will be required to carry out ID checks just once, rather than at various stages throughout the process.
The department said it hopes to learn from countries such as Norway where property sales can complete in around one month.
Currently home buyers and sellers in the UK face delays of almost five months.
On top of this the Government has announced its next steps on leasehold reform. These include giving leaseholders more control over how their service charges are spent under changes coming into effect on March 3.
From this date, leaseholders will also no longer be required to cover their freeholder’s legal fees when making a Right to Manage claim.
This type of claim allows leaseholders to change the management of their property if they are facing unfair charges or poor maintenance without buying the freehold.
Matthew Pennycook, the housing and planning minister, said: “We are streamlining the cumbersome home buying process so that it is fit for the 21st century, helping homebuyers save money, gain time and reduce stress while also cutting the number of house sales that fall through.
“Our modernisation of the system sits alongside further reforms to improve the lives of leasehold homeowners across the country, allowing them to more easily and cheaply take control of the buildings they live in and clamp down on unreasonable or extortionate charges.
“These reforms build on the Government’s Plan for Change to deliver higher living standards and 1.5 million safe and decent homes in this parliament, and our ongoing efforts to protect leaseholders suffering from unfair and unreasonable practices as we work to end the feudal leasehold system for good.”
