All hail the day of the stress-free house move

The Government wants to take the stress out of the way we buy and sell houses - but its main solution, sellers' packs, has not met universal approval. By Ginetta Vedrickas
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The Independent Online

Studies have shown house-buying is as stressful as divorce and marginally less so than bereavement. An estimated 28 per cent of transactions fail after an offer has been accepted. Once an offer is accepted it takes, on average, 62 days to get to the point of exchange of contracts. About 1.5 million households per year move house and around £350m is lost in abortive transactions.The Government wants to make the process of buying and selling your home quicker, cheaper and more reliable. It has introduced the Homes Bill, which is currently making its way through Parliament. The Bill finished the committee stage last month and becomes law by 2003.

Studies have shown house-buying is as stressful as divorce and marginally less so than bereavement. An estimated 28 per cent of transactions fail after an offer has been accepted. Once an offer is accepted it takes, on average, 62 days to get to the point of exchange of contracts. About 1.5 million households per year move house and around £350m is lost in abortive transactions.The Government wants to make the process of buying and selling your home quicker, cheaper and more reliable. It has introduced the Homes Bill, which is currently making its way through Parliament. The Bill finished the committee stage last month and becomes law by 2003.

What changes are proposed?

The Homes Bill is based on findings from a Bristol pilot scheme in which 180 sellers were given the chance to sell their homes with the benefit of a government-funded sellers' information pack. The pack contained a home condition report, local searches, planning permissions and legal titles. Currently buyers bear these costs.

What were the key findings?

Six out of 10 sellers declared the pack easy to understand and contained the right amount of information needed. A similar proportion of buyers agreed that the pack holds the right amount of detail on which to base decisions.

Both buyers and sellers supported the principle of sellers' packs. More than 80 per cent of buyers were satisfied with the process compared with an earlier study, based on the current system, in which just 45 per cent rated themselves satisfied.

Two thirds of sellers' packs were completed within the 10-day target. The average time from offer acceptance to exchange was cut from a national average of 62 days to 48 days, although others in the chain would not have had the benefit of sellers' packs.

What does the Government want to achieve?

It hopes to speed up the process and reduce the incidence of gazumping which although fairly low - about 1-2 per cent of transactions - is more common in areas of high demand. They hope that a more transparent system will reduce stress levels and improve consumer satisfaction.

What implications does this have for sellers?

Vendors will initially bear the cost of the packs, estimates have ranged from £500 to £750 but, as 90 per cent of sellers are also buyers, they will not have to pay for a survey of the property they are buying unless they wish to commission additional surveys as will be the right of all buyers.

The Government hopes that market forces will come into play ultimately reducing costs as, in an effort to remain competitive, estate agents, surveyors and conveyancers may initially bear costs and then deduct them on point of sale.

What does this mean for buyers?

Buyers will benefit from being able to examine the home condition report and searches before incurring costs themselves. If they wish to go ahead they are advised to have mortgage agreements in principle (AIPs) to prove that they are serious. The Homes Bill allows vendors to refuse to provide buyers with a sellers' pack if they believe that buyers are "unlikely to have sufficient means to buy the property in question".

Stephen Smith of Legal & General says: "It is not unreasonable that since sellers will have to take more responsibility for getting their homes moving by preparing a sellers' pack, that buyers should also put their cards on the table too. That means sorting out their finances and getting an AIP before they start viewing homes."

How has the public reacted?

A survey of 1,000 homeowners carried out by Legal & General last year showed only a quarter of homeowners were aware of the proposed changes.

What timescales are involved?

The Government has set a target date of 1 January 2003 for packs to be compulsory but a growing band of estate agents, surveyors and lenders are piloting sellers' packs before they are mandatory to improve customer service.

What are the main criticisms?

Some agents are worried it could deter "toe dippers" - potential speculative vendors who put their properties on the market to see what price they can get - and this could ultimately dampen the market. There have been concerns over potential costs to vendors at the lower end of the market.

Is this a new thing for the UK?

Some estate agents have been using sellers' packs for some time. One Bristol agent, Maria Coleman, introduced the system in 1997 and has a fall-out rate, where offers fall through before exchange, of 6 per cent against a national average of 33 per cent.

Would it be better to use the Scottish system?

The Scottish system guarantees certainty once a sealed bid is accepted, but in areas of high demand many potential buyers lose money on abortive survey fees.

What are systems like in other countries?

Denmark and Australia have similar systems to the sellers' pack where figures show that the process is faster. In the US a similar system applies with sales taking on average one week compared with eight in the UK.

Are lenders in favour of the proposals?

After initial reluctance, lenders have softened and are consulting with the Government on how to enact the system.

What do the property professionals say?

Ray Barrowdale of the Royal Institute of Chartered Surveyors approves of the new system. He said: "It will quicken the process, make it much more transparent and also help to reduce stressin the home-buying process." But Hugh Dunsmore Hardy of the National Association of Estate Agents warns: "Our one regret is that the focus is entirely on the seller to provide information; there is no reciprocal requirement from the buyer."

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