Ministers act to speed up home buying

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Indy Politics

Ambitious plans to speed up homebuying will be unveiled by the Government this week when it announces a new scheme aimed at ending the misery of gazumping.

Ambitious plans to speed up homebuying will be unveiled by the Government this week when it announces a new scheme aimed at ending the misery of gazumping.

Ministers have decided to go ahead with a compulsory "seller's pack" after a pilot study found that it could save time and money for people wanting to buy a home.

Under the proposals, sellers will be required by law to produce a pack that includes a structural survey, local searches, planning permissions and legal titles.

Such documents are currently paid for by the buyer, but in recent years the practice of gazumping has meant that millions of people have lost money when they were outbid for a property.

Together with lawyers' fees, the cost of a surveyor's report and local planning searches can run to several hundreds, if not thousands, of pounds, and ministers are determined to give consumers a better deal.

The introduction of a compulsory seller's pack, which is likely to become law after the general election, will hit the principle of caveat emptor (buyer beware), where purchasers are responsible for defects identified after a sale.

Results from a pilot scheme run in Bristol, to be published on Friday, will show that the seller's pack cut the time taken to exchange contracts and complete a sale and left buyers and sellers much clearer about their rights.

Nick Raynsford, the Housing minister, who will meet estate agents involved in the project this week, has decided to roll out the scheme nationwide to repeat its success. The year-long trial, which centred on 250 transactions and which cost £325,000, has been audited by the Department of the Environment, Transport and the Regions (DETR).

The Bristol study was criticised by some building societies, notably the Bristol and West, but most estate agents who took part approved it and it has the backing of the National Association of Estate Agents.

Among the main findings of the research were that more than 60 per cent of the sellers believed the pack was easy to understand, with a similar proportion of buyers saying that it included sufficient detail.

Two-thirds of the packs were completed within a 10-day target and the average time from offer acceptance to exchange was 48 days; much quicker than the national average of 62 days. Buyers, especially first-time buyers, felt that the packs not only saved them money but also took some of the "mystery" out of the whole process.

The pack was also tested in Burnley and Bradford to check that it could make life easier in those areas where prices are low and the housing market depressed. Owners in such areas find it can take months or even years to sell their homes.

The scheme was welcomed in those areas as a means of speeding up the process and offering security for buyers of properties valued at less than £30,000.

However, some critics of the scheme pointed out that it could cost sellers £500 each to produce the packs, which would have to be completed before they put their homes on the market. Estate agents may foot some of the bill.

Although the incidence of gazumping has fallen in recent months and has largely affected only property "hot spots" in the South-east over the past year, ministers are determined to reduce the misery it causes.

Britain lags behind most of Europe with an average selling time of 12 weeks, while sales in countries such as Holland, Denmark and Sweden are completed in as little as four weeks.

The DETR believes the packs - which will contain copies of title documents, replies to standard preliminary enquiries made on behalf of buyers, copies of any planning consents and approvals, and guarantees for work carried out on the property - will become compulsory by 2003.

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