Government confirm their plan to improve the Home Buying Process post Cabinet changes
This was the message relayed by Matt Prior during Wednesday’s Bold Legal Modern Law Conveyancing Conference, discussing the Government response to the industry consultation.
Held in London’s Royal College of Physicians, the Today’s Conveyancer team were pleased to be in attendance of the event, providing the opportunity to hear from a wide range of speakers on current challenges affecting the profession. It was also the perfect platform to engage with professionals and organisations from across the sector, discussing the issues that they’re experiencing, as well as exploring how the process could develop in future.
Educating the industry as well as consumers
Getting the day off to an insightful start was Kate Faulkner, discussing the property sector at present as well as how it’s likely to change. The well-respected property market analyst and commentator highlighted the current state of the market, stating that the growth of property value was subsiding, with people being less inclined to move. Prospective buyers are put off by conflicting media reports giving the impression that prices are continually growing, despite this only occurring on a specific regional, rather than national basis.
She then went on to discuss how she expects the market to change, with a particular focus on technology, professionalism and education. This included the view that introducing estate agent qualifications are a step in the right direction, as well as improving communication; both with consumers and with other parties to the transaction. Kate linked this to the need for change in terms of education, with the industry being the starting point. She made it clear that before consumers can improve their understanding of the house buying process, professionals that are part of the transaction need to build a better understanding of what the others do. It is at that point which better information and education can be delivered to the public at large, which should be provided at the earliest possible point.
Defining the role of the conveyancer
During the following Question and Answer session, Kate was joined by Chief Executive of the HomeOwners Alliance, Paula Higgins. They both focussed on the difficulties conveyancers have in communicating the value of the service they provide, particularly in terms of the way their role is viewed by consumers. Comparing the sector to industries such as travel and finance, they suggested a need for more independent commentators, acting as a bridge between the public and the process itself. This, it was felt, would help to mitigate the view that conveyancers are there simply to delay the transaction process.
In the same vein as improving communication, a number of professionals made it clear that the extent of their role in the process was often not clearly defined; in turn, they were having to undertake assessments and additional checks that are outside the remit of their responsibility. With an aim to help alleviate this issue, Kate and Paula suggested a tick box system which would need to be applied across the industry, defining the responsibilities of each party involved in the process. Where a consumer requested a service or asked something which goes beyond the job of the conveyancer for example, they would be able to tell the consumer as such and pass their request on to the appropriate party.
Paula also highlighted the extent of the work currently being undertaken in regard to changing the housing process for the better; it seemed clear that this indicated greater traction as far as improvements are concerned.
Adopting a multi-layered defence
Following this was a Cyber Awareness Training session from the NCSC’s Lucy T and Graham Murphy, former CQS Product Manager at the Law Society and Current Bold Legal Group Consultant.
The ‘cyber threats to UK business’ report highlighted that there was no deceleration in tempo or volume of cyber attacks over the last year, with a particular focus on business email compromise – the third most common way criminals defraud a company.
Lucy then described the typical way fraudsters target a conveyancing firm, with the majority beginning with a phishing exploit, utilising the information staff have shared online. Graham warned of the dangers of this, explaining the clever methods that criminals use to intercept transactions by monitoring the social channels of firms. He stated that everyone from the senior team to the junior staff should be alert to what they’re publishing online, and that content posted should be both relevant and specific.
The talk then moved on to defence mechanisms, with the NCSC recommending that firms adopt a four-layered approach; this helps to ensure where one method fails – such as a spam filter – they will be caught by one of the remaining three layers. Whilst these measures can be fairly basic, implementing more than one can significantly reduce the chances of a firm being impacted by an attack. For example, Graham suggested the use of tools such as DMARC, and the growing role of similar software being used within the industry, stating:
“Unfortunately there is no magic button for the mitigation of cyber crime. But firms can take really positive steps to ensure that they protect themselves as well as they can. Simple steps such as backing up data, installing patches and updates, using strong passwords, training staff on a regular basis and looking at obtaining Cyber Essentials or Cyber Essentials Plus plus using systems such as DMARC are really proactive steps that firms can easily take.”
Awaiting further clarification
After this, the focus shifted to recent case law, with Stephen Ferrie of Armstrong Watson exploring the recent Brabner’s case. The decision concluded that search fees could not be treated as disbursements for VAT purposes even where a solicitor had not made use of the report when providing advice. Whilst the decision of the tribunal is no binding, it has since led to a great deal of uncertainty – both for search providers and professionals – on the VAT treatment of electronic property searches.
As well as commenting on the report issued by Armstrong Watson, he also emphasised that the Law Society are interested in hearing from professionals contacted by HMRC in regard to VAT searches.
No silver bullet
Next to take to the stage was the Matt Prior of the Ministry for Communities, Housing and Local Government, discussing the Government’s response to the Call for Evidence.
Whilst he made it clear that there is no silver bullet to improving the transaction process, he highlighted the key areas the Government were hoping to address; namely improving the consumer experience, reducing time from offer to completion and reducing failed transactions. Where consumer experience was concerned, Matt focussed on the currently homogeneous view that consumers have when trying to find a conveyancer, and the difficulties in identifying what to look for. Whilst stating that the Government could outline points to be actioned, he said that improving transparency was largely down to the industry, suggesting that conveyancers could provide metrics to enable consumers to make a more informed choice.
He also spoke about referral fees, and the proposal for transparency of the commercial arrangement to be made clear from the offset. This was suggested as a way to mitigate the potential hindrance the fees are having on consumer decision making, deterring them from actively looking around and comparing quotes. However, one criticism related to the impact of a ban or movement towards transparency, suggesting that bribes or alternative methods would instead be used to build business.
Education and Innovation
Drawing attention to the current lack of central information point, Matt also said that consumers would be likely to gain significant benefit from proposed ‘How to Buy’ and ‘How to Sell’ guides, stating that these would also include advice points of selecting a conveyancer. Whilst these were seen as an important stepping stone to improving education on the process, the distribution of these was a matter still being considered, with a number of professionals expressing doubt whether they would be read.
Looking at reducing the time between offer and completion, Matt outlined the Government’s support for greater utilisation of technology, highlighting the steps already being made organisations such as HM Land Registry for example. Whilst there may be a number of innovators capable of improving the process, it is a question of bringing them together to align objectives and synchronise their contributions.
Also suggested as a way to potentially reduce delays, Matt outlined provision of information up front as a form of property passport, to be made available when it first goes on the market. However, concerns were raised as to whether this would be kept up to date and where the responsibility for updating this would lie.
A key point made related to consumer confidence; research of 2000 home buyers showed that two-thirds were concerned they wouldn’t reach completion following the acceptance of an offer.
“We want to get to the point where we have serious buyers buying from serious sellers,” Matt stressed, highlighting the predominant aim to reduce the number of failed transactions and improving the level of commitment between parties from the offset.
With an aim to achieve this, Matt discussed the piloting of reservation agreements, the idea of which received a positive response from the public. These will include financial consideration, though the specific amount has not yet been clarified.
Outcome yet to be reached
The final speakers were Barrister Peter Dodge, Barrister and Jeremy Cousins, QC at Radcliffe Chambers. Both had been on the counsel representing Mischon de Reya on the Dreamvar case. Whilst the appeal judgment was unfortunately not handed down in time for the talk, the discussion focused on the key points of the case and the matters on which the decision could be made.
This included the breach of warranty of authority, the extent of the meaning of ‘vendor’ and whether this included someone purporting to be the vendor, as well as considering the previous case law commentary. Also discussed was the matter of insurers, and the availability of a product which would cover instances where no party is at fault; the general view was that in order to mitigate the cost of fraud should it occur, purchasers would be likely to pay. Of course, the real hope is that the position will be made clear when the appeal judgment is delivered.
If the day made us realise anything, it was that the challenges in the sector have never been more pressing, or less clear in how to fix. It will be interesting to see how the sector progresses and adapts to tackle the current problems, and whether the issues raised at this year’s conference will still be issues in a decade’s time.