Improving the home buying and selling process in England

The home buying and selling process

The home buying and selling process in England and Wales is not mandated in detail by law; the law provides a broad framework in which the parties are free to decide how to shape their own transactions. In practice most transactions follow standard industry protocols and are completed through a private contract.

Conveyancing involves the legal transfer of home ownership from the seller to the buyer. The conveyancing process is complex and multi-staged. Key features include:

• Sellers accept offers to purchase ‘subject to contract’. Such agreements are not legally binding; either party can withdraw without penalty until the point at which contracts are exchanged.

• Once an offer is accepted, both parties will instruct a conveyancer (either a solicitor who specialises in the transfer of land or a licensed conveyancer) and begin the conveyancing process.

• The legal principle ‘Caveat emptor’ (buyer beware) applies – this places the onus on the buyer to find out if there are any physical defects or legal issues relating to the property. The buyer’s conveyancer will gather information about the property from various public authorities and the seller’s conveyancer.

• Once contracts have been signed and exchanged the parties may not withdraw from the agreement without penalty. The final stage of the process is completion – at this point the financial transaction is completed and ownership of the property changes hands.

The conveyancing process in Scotland differs from that in England and Wales.

Concerns with the current process

There were over 1 million residential property transactions in England in 2020/21. Despite a large number of successful transactions, the consumer experience of buying and selling property is often criticised for not being as efficient, effective, or consumer-friendly as it could be. Moving home is widely acknowledged to be among the most stressful of life experiences.

The key areas of concern to home movers and industry stakeholders include:

• The time taken to complete a transaction.
• The number of transaction failures.
• Consumer inexperience.
• Lack of transparency around conveyancing services and the payment of ‘referral fees’.
• The weak regulation of estate agents.

Proposals to improve the process

The Conservative Party Manifesto 2017 committed to “reform and modernise the home-buying process”. In October 2017, the Government launched a Call for Evidence seeking the views of industry and the public on how to improve the process.

The Government’s consultation response, published on 8 April 2018, concluded there was no ‘silver bullet’ – no single fundamental change which would improve the process. Instead, the Government proposed a number of smaller, incremental changes to the current system, which when taken together are intended to make the process “quicker, cheaper and less stressful”.

The consultation response set out the Government’s ‘Plan of Action’ to improve the home buying and selling process in England, including proposals to:

• Strengthen the regulation of estate agents.

• Ensure the public are better informed of the process.

• Reduce the time from offer to completion by:

1. harnessing advances in technology;
2. ensuring the relevant information prospective home buyers need to know about a property is available up front when the property is marketed;
3. setting fixed time frames and maximum fees for the provision of leasehold information; and
4. requiring local authorities to respond to search requests within 10 working days.

• Work with industry to develop and pilot a standardised reservation agreement to increase commitment between buyers and sellers earlier in the process.

Stakeholders have been broadly supportive of the Government’s proposals to improve the home buying and selling process.

The Government has made some progress in implementing its proposals.

Conveyancing in other countries

In many countries the home buying and selling process is quicker than in England, more property information is provided up front, buyers and sellers have greater certainty that the sale will go ahead, there are less transaction failures and chains of sales transactions are less common. However, the fees and taxes associated with buying a property in other countries may be more expensive.

Section 6.1 of the briefing paper outlines the key features of the conveyancing system in Scotland.