Home-buyers on shaky ground

Last week, a man was jailed for assault after being 'gazumped' out of his dream home. Proposed new legislation aims to take the stress out of conveyancing. But will it work?

Buying or selling a house can be more stressful than getting married or changing jobs. For Lester Stacey, it has cost him three years in prison after he was convicted of threatening to gouge out the eyes of a man who scuppered a property deal by raising the sale price by £200,000.

The judge who sentenced Stacey last week said he understood how disappointed he must have felt when he was told the deal had fallen through, but it was no justification for punching the seller in the face and holding him hostage in his own home.

In mitigation Stacey, 39, said he couldn't control his temper because his wife and children were already packed and ready to move into the luxury farmhouse in Staffordshire when he was given the bad news. The seller, Adam Adamou, said he had thought Stacey was a cash buyer, only realising some time later that he did not have the money and was trying to raise a mortgage.

If the Government had honoured its 1997 manifesto promise to speed up the conveyancing process, Adamou, a 50-year-old retired businessman, might have been spared his terrifying ordeal. The same could be said for the anguish of thousands of victims of gazumping who suffer when their seller decides at the last minute to offer the house to another buyer for a higher price.

Six years ago, Labour promised to speed up conveyancing, so reducing the time during which sellers could pull out of the sale or find a buyer prepared to pay more for their house. Under the Government's proposals, home-owners will have to pay between £500 and £1,000 for home information packs, which include a survey, condition report and searches, when they sell their own homes.

But the legislation, which is still making its way through Parliament, is facing tough opposition from both the Conservatives and the Liberal Democrats. And last week it emerged that the new Housing Bill can expect a rough ride when it is debated in the Lords. The Liberal Democrat spokeswoman Baroness Maddock told her Lords colleagues: "We do not believe [home information packs] will achieve the Government's aim of speeding up house sales. It seems to me that this sector of housing is where we have the least problems in this country. There has been a pilot scheme in Bristol, and the results, I believe, were not convincing." A principal fear is that the proposals will criminalise conveyancing by making it a criminal offence for sellers not to ensure that all the information about the property is in place before details are advertised or appear in an estate agent.

Lady Maddock said that other developments were already taking place in the home-buying and -selling area, involving the National Land Information Service and electronic conveyancing. These innovations would do more to ease the process of buying and selling homes than the packs proposal, she added. "From my own experience and that of my family, the difficulties in buying a house centre on trying to deal with those lending money for mortgages and those dealing with legal matters. They don't stick to a timetable; they say they are going to ring you back and they don't."

Neither have the sellers' packs found favour with estate agents or lawyers. The Law Society's chief executive, Janet Paraskeva, says: "These proposals will add significantly to the cost of moving home, which will have an extremely adverse effect on poorer home-owners."

Under the scheme, home condition reports would be produced by a new type of qualified inspector. The Law Society fears that the public may not be properly protected if they rely on a report that subsequently turns out to be wrong or misleading. Paraskeva adds: "There should be in place something along the lines of the solicitors' indemnity insurance arrangements to protect consumers if things go wrong. If buyers cannot safely rely on the reports they will still need to commission their own survey, which will push up the costs of the house transfer system."

The society also believes that changes taking place in the internet and e-mail will be useful. The Government has already introduced the National Land Information Service (NLIS), which permits parties to submit documents electronically to the Land Registry rather than by post, and has made proposals for electronic conveyancing. These will "ease the process of buying and selling homes" far more effectively than the proposals in the Housing Bill.

The society is also disappointed that the Government has missed the opportunity presented by the Bill, introduced in the Queen's Speech last month, to introduce a statutory tenancy deposit scheme. Paraskeva says: "The proper management of deposits is a significant issue. If disputes about deposits are not resolved satisfactorily, tenants may not have the necessary funds to move on to the next property in the private rented sector. This affects people's mobility and may exacerbate homelessness."

But none of this is any comfort to the one-in-three buyers who are gazumped or sellers who are "gazundered" (where a buyer reduces his offer at the last minute) each year, at a cost of £350m to buyers and sellers. Estate agents say that it takes more than 10 weeks to sell a property from the moment it is put on the market to the exchange of contracts. That leaves plenty of time for things to go wrong. Last month, the Royal Institution of Chartered Surveyors reported that gazumping was making a comeback in the housing market as wealthy buyers compete to snap up the limited number of quality properties on offer.

Last week, the regional development minister, Lord Rooker, defended the home information packs against criticisms from opposition peers. He said that nine out of 10 people were "very unhappy" with the process of buying and selling homes. Lord Rooker said research indicated that making key information available at the start of the process would make home buying and selling easier, more transparent and more successful.

Lord Rooker indicated the Government, six years after it had first promised to legislate, was not going to be distracted from its big idea for the property market. "We are discussing with consumer and industry stakeholders the possibility of a phased introduction of home information packs as part of a national roll-out."