Property: Has the chain gang had its day?

The Government wants to speed up home-buying. But will its plans have the desired effect?
Click to follow
Indy Lifestyle Online
VENDORS CAUGHT in the lengthy, expensive and stress-filled moving process may be cheering this week's launch of proposals by a task group intent on speeding things up. Or will they groan at the thought of paying pounds 400 for a survey of their own property with no guarantee that they will ever be able to sell?

The package aims to hasten a process which is cheaper in England and Wales than most countries but takes on average 12 weeks as opposed to their seven. The measures are intended to reduce gazumping and problems with chains, but the Government is seeking further public views on its proposals before next April.

Launching the package earlier this week, the Housing Minister, Hilary Armstrong, said: "We want a streamlined system that is easier and faster for everyone. We want success without stress."

The proposals stem from the largest-ever home-buying survey, involving 1,500 buyers and sellers, and 700 estate agents, solicitors and lenders. The most radical move is the idea of a seller's information pack, which anyone putting their property on the market must produce. Costing around pounds 400, it will include a survey, copies of title documents, replies to preliminary enquiries, copies of building regulations, a draft contract and any guarantees of work carried out.

Consumer groups broadly welcome these measures, but critics foresee little improvement to a system where lenders will still insist on buyers' own surveys. Estate agents and surveyors warn that fees will rise as a result.

Michael Day, the vice president of the Incorporated Society of Valuers and Auctioneers, questions the ethics of forcing vendors to obtain surveys, which he believes will further delay the process.

Mr Day thinks a "massive cultural change" is needed if buyers are to trust vendors' surveys and believes the only way of getting a faster service is to increase spending. "We must invest in people and technology, which inevitably costs more," he says. He blames the legal process for most delays and says that "cutting fees to the bone" hasn't helped: "If you pay peanuts you get monkeys."

David Parkin, a surveyor, agrees that fees will probably be pushed up as surveyors extend personal in- demnity insurance to protect themselves against litigation from buyers and vendors.

He is concerned with the potential for duplicity: "Vendors with a bad survey may disguise the problem and get another survey from a different firm." Mr Parkin thinks that the proposals could dampen the housing market: "Why should people be deterred from putting their properties on and `testing' to see what they can get?"

Government plans relate to all parties involved in the moving process. This includes buyers getting "in-principle mortgages" before making offers and lenders supplying title documents to the seller's solicitor within five days and processing mortgage applications within two. They suggest that flexible "chain-breaking" mortgages could replace expensive bridging loans and want insurers to devise specific policies to protect against gazumping.

It is unclear if measures will become compulsory through legislation. However, some professionals fear that non-mandatory proposals will be ineffectual. Penelope Tilston, of Tilley Carrow, a homebuying service, says: "I can't see this working on a voluntary basis. Forcing people to get full surveys initially will certainly slow the process."

She also sees differences within the market: "At the top end the process is fast enough, and we shouldn't rush people into what is likely to be the biggest investment they will make."

Some pockets within the industry have introduced efficiency-improving strategies. Barclays Mortgages is testing the use of electronic links with valuers and offers telephone conveyancing. And a pilot scheme in Hull allows customers to complete on their purchase up to seven days before completing on their sale and so avoids undue stress.

Some estate agents already have government plans in operation. The Suffolk agency Bedfords introduced seller's information packs in 1992: "Before, a buyer would offer pounds 20,000 more for a property than other interested buyers but would reduce his or her offer by this amount when they got the survey back. Now there can be no renegotiation."

But isn't the survey an unwelcome expense for sellers? "Five hundred pounds spent now saves you pounds 5,000 renegotiating later. If problems arise from the survey you can either leave it, get the work done or get a quote, which most vendors do," says Mr Bedford.

So if you're stuck in a chain, waiting for a mortgage or just waiting, contact Hilary Armstrong with your suggestions. At worst it will pass the time and might even help you move.

The Proposals in Brief:

l Sellers' information packs

l Buyers to get "in principle" mortgages

l Lenders to process mortgage applications within two days

l Councils to process searches within 10 days

l Lenders to offer "chain-breaking" loans

l Insurers to develop policies to protect against gazumping

Comments