Labour's ultimate position on free markets is, still, somewhat ambiguous. But to the Blair government's great credit, it seems that, before even a year is up, it intends radical change in the business of house-buying and selling. The proposals to prevent gazumping which are now being trailed look like an excellent place to start. We hope it has the courage to challenge the vested interests in law offices and high-street estate agencies which are partly responsible for making moving house such hell for many people.
Buying a house is a special kind of purchase, and not just because of the amounts of money and debt involved. Emotions will run high, even in the best-ordered system. But tension would certainly be reduced if, after a property is found, vendor and purchaser are required to engage in a more formal commitment than word-of-mouth promises, nods or handshakes. One proposal is for a "pre-contract", involving a financial commitment both by the vendor who accepts an offer and the purchaser who makes it. Even at 1 per cent of purchase price, in many parts of England this would involve a substantial sum which no sensible person would lightly put at risk. This seems to be better than, say, emulating the Scots and basing property bargains on sealed bids. To those who argue that this would inhibit flexibility and put pressure on those in the middle of "chains", the answer has to be: binding decisions have to be made sooner or later and to keep the exit door open as long as it is at present is an invitation to bad faith and wasted resources.
But better regulation of the relationship between vendors and purchasers entails reform in the two key housing market "professions", the law and estate agency. Here again the Conservatives were cowardly, going nowhere near far enough in encouraging the growth of specialist (and cheaper) conveyancing. As for estate agents, there were too many of them on the Tory back benches for ministers to want to push them into taking responsibility for transactions, let alone proper descriptions of property, adequate surveying and so on. Labour is not so weighed down.
Under its prodding there are scores of useful ideas to be tried out, such as "log books" for property. We report today how the mortgage companies are moving, not before time, to automate (and cut the cost of) the business of valuation. Rafts of new legislation are not necessary. Good ideas would emerge if the market were more competitive, if customers were more self- confident and advisory services more effective. The Government's principal role is to hold the ring and ensure that professional bodies such as the Royal Institution of Chartered Surveyors and the Law Society do not obstruct innovation.Reuse content