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The government has announced plans to reform the home-buying process in an effort to cut costs, reduce delays and make moving home less stressful for everyone involved.
Under the current system, as many as one in three property sales fall through. This can be due to any number of reasons, with the most common including the buyer changing their mind, the seller getting a higher offer, the buyer struggling to get a mortgage, a survey flagging issues with the property, or a broken chain because the buyer hasn’t been able to sell their property.
Here, we explain what the government is proposing and how it could potentially prevent such large numbers of property sales from falling through.
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Why does the government want to change the current system?
If you’ve ever bought or sold a property, which many people in their 50s, 60s and beyond have, you’ll have a pretty good idea of just how fraught the process can be. Until contracts are exchanged, either the buyer or seller can pull out, often leaving those involved hundreds, if not thousands, of pounds out of pocket.
Collapsed property sales cost the UK economy an estimated £1.5 billion annually, according to the government. It hopes that by increasing transparency and potentially introducing binding contracts, the number of failed sales could be cut in half.
Housing Secretary Steve Reed said: “Buying a home should be a dream, not a nightmare. Our reforms will fix the broken system.”
What changes is the government proposing?
Currently, when a property is sold, buyers typically receive most information about their prospective new home relatively far down the conveyancing process.
The government shake-up would see sellers and estate agents legally required to provide key information about a property up front. This would include details about the property’s condition, any leasehold fees, and whether it’s part of a property chain.
The aim is to make the system much more transparent from the outset, so buyers have a clear picture rather than being hit by unexpected issues further down the line. According to government estimates, the reforms could save first-time buyers an average of £710 and shave up to four weeks off the typical property transaction.
Those already in a chain could also see a smaller but still significant saving of around £400, with reduced buying costs outweighing slightly higher selling expenses.
The proposals would mean that the English and Welsh home-buying system moves nearer to the current Scottish home-buying system, which already provides more upfront information to buyers and makes contracts binding earlier in the process, helping to prevent last-minute fall-throughs.
The plans also include measures to raise standards across the housing sector. A new Code of Practice is proposed for estate agents and conveyancers, along with side-by-side performance data so buyers can more easily compare these services based on experience and reliability.
A full roadmap outlining how these changes will be rolled out will be published early next year, after the proposals have been consulted on. The reforms form part of the government’s wider housing strategy, which also includes plans to build 1.5 million new homes.
A final thought
Less uncertainty, clearer information up-front and fewer last-minute surprises could make the process of buying or selling a home a little less stressful, as well as more affordable.
Ben Thompson, deputy chief executive at the Mortgage Advice Bureau, said: ”All too often transactions are delayed, or collapse altogether, due to lack of upfront information or unnecessary inefficiencies, causing stress for buyers and putting mortgage offers at risk.
“Improving transparency when a property is first marketed and reducing the average transaction timeline will not only help buyers make more informed decisions, it will also ensure mortgage offers remain valid and aligned with the faster pace of the transaction. These changes should reduce the number of deals that fall through, saving borrowers and our industry both time and money.”
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Want to speak to a mortgage adviser? Speaking to an experienced adviser can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 2,600 reviews.
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