Surveyors hail revolution in house buying

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The Independent Online
THE GOVERNMENT'S proposed reforms to overhaul the housing market received a broad welcome yesterday, but there were also warnings that they may not be the cure-all they have been held up to be.

The measures, in a consultation paper, are intended to make home-buying cheaper, simpler and quicker. They will, it is claimed, get rid of much of the time-consuming but routine work before negotiations begin, and also go some way towards stopping gazumping.

Among the proposals is a Seller's Pack in which the vendor would provide a survey for the potential buyer, and encouragement to lenders to speed up loan applications, with a proposal that 80 per cent should be processed within two working days.

The Royal Institution of Chartered Surveyors (RICS) welcomed the move, saying that putting the onus on sellers to carry out surveys would mean them making a serious commitment to sell. Instead of inflating prices it should lead to more realistic ones with the cost of repairs being taken into consideration.

And the resulting, faster system, said the RICS, should greatly reduce stress, the possibility of acrimony between buyers and sellers, and the likelihood of deals collapsing.

Louis Armstrong, the RICS chief executive, said: "This signals a revolution in house buying. Most of the ills of the current system, including gazumping, stem from the length of time it takes to move from acceptance of an offer to exchange of contracts.

"These improvements go a long way to minimising the delays that can make house buying so stressful."

But the Council of Mortgage Lenders (CML) responded that the intended speeding up of the process may not take place. The CML would still strongly advise buyers to get their own surveys done and would still insist on a full valuation. It also warned that sellers may try to recoup the cost of the survey with a higher price.

A number of building societies also warned that the extra cost of a survey may make some sellers wary about putting their properties on the market, and the proposals may introduce "new hurdles". Sellers will be asked to pay for surveys with no guarantee of a sale at the end.

Sue Anderson of the CMLsaid: "Obviously we support the principle that potential buyers can get access to information at an earlier stage. But the vendor is going to want to see the cost of the survey recouped in the price they are charging for the house.

"From the lender's point of view we would still require a survey to be done. This could leave us with a situation where the vendor has a surveyor going around, followed by another who has been sent to reassure the lender."

There is a further potential problem, said the CML, that some unscrupulous sellers may try to secure the most favourable, and not the most exhaustive, survey.

Two major building societies, the Halifax and Nationwide, echoed these concerns. Alison Roberts, spokeswoman for the Halifax, said: "Many sellers will be unwilling to pay for surveys."

Steve Blore, of the Nationwide Building Society, added: "The start-up costs of selling homes will be in excess of pounds 500 with no guarantee that the property will be sold."

Who Will Benefit from New Rules?

The buyers

It took Mark and Susan Wilkinson 10 weeks to find a flat and to get ready to exchange contracts. But at the last minute they lost the flat to a bid pounds 4,000 higher than theirs. Under the new proposals their mortgage would have come through faster, and they would not have lost the money they spent on a survey, which, with other costs, came to around pounds 650.

The sellers.

The flat the Wilkinsons tried to buy was sold to someone else because the vendor said they were taking too long. Under the plans there is less chance of this, and vendors will have to pay for surveys.

The lenders

The mortgage companies say they welcome speeding up the transaction but some of the proposals, they say, will not have the desired fast-track effect. Most mortgage lenders would still have strongly advised the Wilkinsons to have their own survey carried out.

The estate agents

They should have a faster turnover of properties and thus greater trade under the new rules, according to the proposals. However, many appear wary of the added cost that will be passed on to the vendor.