Today’s Conveyancer Feature: Reforming the Conveyancing Process

The home moving process is something that most people will experience at some point during their lifetime. Figures from HM Land Registry indicate that over one million homes are bought and sold each year.

Given the frequency of transactions taking place, it would be expected that this process would be straightforward, or at least have made significant steps towards change. However, as has been widely communicated by both the public and professionals, the process remains problematic.

This article will consider the problems with the conveyancing process, looking at both the main criticisms of the system and what should be taken into account in its reform. It will also look at the recently launched ‘Call for Evidence’, highlighting the views of industry experts on what they feel should change. We’re holding an informative webinar on what this Call for Evidence could mean for conveyancers – if you’d like to attend, please click here.

CONTENTS

• What’s the problem?
• Transaction time
• Client Communication
• Not so predictable prices
• Supporting innovation
• Call for Evidence

What’s the problem?

Whether it’s too slow, too little correspondence or simply a lack of understanding, consumers are consistently criticising conveyancing as the most complex part of the home moving process. What’s more, many are unsure as to what it means prior to being involved with the process themselves.

For those within the industry, the issues simply begin with those above.

Rather than holding up the process intentionally – which many clients may feel is the case – professionals are buried beneath heavy workloads, trying to communicate with the other side, gather the necessary information to progress a transaction as well as keep the client up to date. That’s without even mentioning the need to adhere to strict compliance policy and safeguard against the growing risk of fraud.

Transaction time

In terms of time taken to process a transaction, this is an issue which stretches across the whole of the home moving process. Whilst conveyancers obviously play a key part of the process, the speed at which it takes place is dependent upon the other involved parties, such as estate agents and lenders.

This is largely down to issues with communication, something which is regularly cited as an issue within the industry. A need for improved links to be built as well as a greater provision of information at an earlier stage has been highlighted as a simple way of improving transaction speed. Processes can often be held up by missed phone calls or a box left blank, and whilst some firms are developing internal systems to curtail this, there may be room for a plan to be rolled out industry wide. This is, of course, easier said than done. The relationship between estate agents and conveyancers is an important one, especially given their reliance on one another to provide large amounts of work in some cases. Therefore, improving communication in this way is arguably in the interest of both parties.

Client communication

However, the need for improving levels of communication extends outside of the industry and to consumers themselves. For many, conveyancing is a mystery until they actually have to partake in the process themselves, and arguably, this alone should signal a need for change.  As previously mentioned, buying or selling a home is something that most people will do during their lives and therefore, should be something that they’re at least familiar with the process of.

The lack of awareness also results in problems for conveyancers; as consumers are unsure of the process, they have no clear expectation and will try to constantly gain information from their conveyancer. This causes delays.

A study by the Legal Ombudsman indicated that the number of complaints received from buyers would have been reduced had there been a better level of communication from conveyancers, again drawing attention to a need for clarity. However, it’s arguable as to what point would be best to provide this. Given estate agents are often the first point of contact for buyers beginning the home moving process, should they be responsible for explaining the procedure outright.

Not so predictable prices

In addition to communication, another issue regularly criticised is market transparency or the lack of it.  Whilst this is an issue across the legal services sector as a whole, conveyancing is an area which, given its intricacies, has been highlighted as especially opaque where price is concerned.

Following a report from the Competition and Markets Authority, legal regulators recently put forward their proposals for improving transparency within the market, stating that it should be seen as a positive opportunity for firms. As well as building competition in price terms, it would also encourage firms to improve the quality of their service in order to stand out amongst competitors.

Supporting innovation

Beyond conveyancing, the home moving process is heavily reliant on supporting organisations who provide vital data on property and land. These organisations play a key part in driving the sector forward both in terms of innovation and consistent reliability.

HM Land Registry, for example, has outlined its plans for a digital overhaul, aiming to build on its developing improvements including online mortgage signatures and its property alert system. Steps such as these indicate that change is happening within the industry and is paving a clear path toward reducing delays and streamlining the process. However, the long-term benefits of these digital enhancements in the sector are yet to be seen, arguably only becoming apparent when the criticism from consumers and conveyancers begins to fall.

It’s not only the Registry who have observed the need for change within the conveyancing industry.

Call for Evidence

Last Sunday, the Department for Communities and Local Government released a ‘Call for Evidence’, entitled ‘Improving the home buying and selling process’. This called for the feedback and opinions of all parties concerned in the home buying process, with a view to developing proposals to move the industry innovation forward.

Based on a poll of over 2,000 people who had recently taken part in the transaction process, the report found that residential property lawyers were the main cause for complication, highlighting the need to explore why this is the case.

Sharing the reaction of the CLC was director of strategy, Stephen Ward. He praised the launch of the ‘Call for Evidence’, stating that the main areas of significance had been highlighted.

“We strongly support the government’s stated desire to “modernise the home-buying process so it is more efficient and less costly”, along with their aim of replacing the current, largely paper-based approach through a digital revolution.”

The Call for Evidence is split into different sections, highlighting different elements of the process itself as well as external factors which could have a positive impact for consumers and professionals.

Beneath each section is related questions put forward by the DCLG, specifying particular aspects of the process which they are seeking opinions on.

Commenting on the need to assist the DCLG was Rob Hailstone. The founder and CEO of Bold Legal Group drew attention to the real purpose of the review, stating that hearing about industry blame culture is unlikely to be in the government’s interests.

“As a profession, we need to point Government in the right direction so that ultimately the client gets a smoother journey and so that those involved in providing the services required are professional, expedient and are fairly rewarded.

“I don’t believe that the Government wants to hear too much about the infighting that sometimes goes on in this industry. Conveyancers blaming conveyancers, agents blaming conveyancers, conveyancers blaming agents, lenders blaming conveyancers and vice versa. You get the picture.

“This Call for Evidence isn’t just about, reviewing referral fees, possibly regulating estate agents, focusing on some of the volume conveyancers or even 19th-century high street law firms (there are still a few out there). It is mainly about the process and the individual parts that make up the process.”

One of the first issues highlighted in the consultation is the need to improve transaction speed. As well as being of benefit to the consumer, reducing the time taken to complete a transaction was also attributed to building industry competition and encouraging efficiency.

Sharing his views on this was Head of Mortgage Lender Relations at Barratt Developments plc, Adrian MacDiarmid. He drew attention the improvements his own firm have made, stressing the need to consistently improve communication with other parties.

“We are working hard to make things easier and quicker for our customers. The number of days it takes for customers to get a mortgage offer from one of our recommended brokers has fallen substantially recently – from 19 days in 2015 to just two weeks now. But we’re not content with this and are actively working with lenders and brokers to improve this further still. Where there is much greater scope for improvement across the industry is the automated sharing of information and data, which can greatly speed up and improve the conveyancing process.”

Jonathan Palmer, Co-Founder of GetMeMoving also highlighted that technology could be central to improving communication within the industry. Highlighting the shared goal that all involved parties are aiming for, he stated: “Technology is able to bring estate agents, solicitors, mortgage brokers and clients together to communicate for the one goal of getting someone into their dream home, as simply as possible. However, we have only scraped the surface of the level and depth in which tech can be used to do so.”

Also drawing attention to the need to improve communication was Mike Bowen, Head of Residential Property Service at Jevons Riley & Pope.

He highlighted the need to maintain a consistent level of correspondence with lenders, reducing the need to chase other parties and risk of delay. With a view to speeding up the process, he stated that lenders should reply to emails in 2 working days.

A key element when it comes to reducing transaction speed, the digital revolution also has its own section within the ‘Call for Evidence’. As previously mentioned, significant steps have already been taken to improve this, however, the need to embrace this remains key. Paper processes remain central to the conveyancing process and how quickly this could be transferred online is unclear.

Despite this, the consultation questions how e-conveyancing could be facilitated, as well as considering how public sector datasets could drive innovation in the home moving process.

Expressing the need for the market to embrace technology was Jonathan Palmer. He stated:

“I believe the only way for the conveyancing market to progress and adapt is through the use of new technology and to bring everyone together through doing so. The world is moving forward, with technology being at the forefront of any new development or change. Why should this stop at conveyancing? The market is very much still stuck in its archaic ways with ‘the old boys club’ mentality seen across the UK.

“Don’t get me wrong, there is a lot of work to be done to change the ‘norm’, however, big changes are coming and it is an exciting time for any forward-thinking company to be a part of.”

Also commenting on the need to modernise the home-buying process was Doug Crawford. The CEO of My Home Move highlighted the company’s support for the Government’s aims, and notably the step towards digitisation.

“We strongly support the government’s stated desire to “modernise the home-buying process so it is more efficient and less costly”, along with their aim of replacing the current, largely paper-based approach through a digital revolution.”

He also highlighted the reluctance of many to adapt to a more digital approach, despite the shift in consumer trends in recent years.

“It’s clear that general trends in consumer behaviour towards digital online services are being resisted by many in our industry so it’s important that the consultation process reflects the up to date views of clients through specific research into the areas where change is being considered.”

Providing his own suggestions on how technology could be effectively utilised within the process was Mike Bowen. He drew particular attention to the ongoing threat of fraud within the industry and suggested that HMLR should play a more significant role when it comes to preventing fraud.

He stated that they should conduct anti-money laundering checks in order to improve efficiency. In addition, he suggested that they should also supply a certificate to lenders, agents, brokers as well as conveyancers. He suggested that as ID verification may be built into their e-signature processes, this may be a natural step for the organisation.

Shifting the focus on to fraud prevention, Mike also stated that the Registry could provide secure email systems to clients, agents, lawyers and lenders in order to streamline the current process and provide a central system for all parties.

Whilst it’s clear that technology will play a key role in the future of the industry, it’s those that are undergoing the home moving process now that should arguably be the priority.

Introducing practical steps that can improve the process, such as increasing accessibility of information and building party relationships have also been highlighted by the DCLG as areas which should be explored.

Commenting on improving access to information was Paul Philip. The Chief Executive of the SRA stated that in addition to price, the quality of service is also important when it comes to prioritising the consumer.

“Too often people really struggle to find basic information about legal services like conveyancing. We want to make it easier for them to find the right service at the right price.

“We have spoken to thousands of people and professionals to help us develop these plans. We have heard that price is important, but so is information about service and quality.”

Drawing attention to this was Rob Hailstone, who stressed that these smaller changes should not be underestimated.

“What, I think Government wants to hear, from the experts (conveyancers at the ‘coal face’), is how homes for sale can become ‘sales ready’, how the parties can become committed quicker, and how the cost of moving home can be reduced. To my mind that doesn’t mean reducing legal fees.”

He concluded by stressing the importance of the consultation, as well as the need for conveyancers to share their view.

“I see this as a great opportunity for conveyancers to become involved in the home moving process earlier in the transaction. That surely has to be a good thing? We have been at the bottom of the food chain for too long.

“Get involved, make sure you have your say, and embrace any changes that come our way.”

It’s clear that there is a need for reform in the home moving process, and the DCLG’s consultation could be seen as a step in the right direction.

However, it’s not guaranteed that the results of the ‘Call for Evidence’ will be reflected in the proposals, and even if they are, implementation won’t happen overnight. Nevertheless, it will be interesting to see how flaws in the industry are dealt with and whether, in the long term, conveyancing won’t be quite so criticised.

The ‘Call for Evidence’ can be accessed here.