Not fit for purpose

A few weeks ago, during a fit of exasperation with the UK house sales process, I took one of my rare forays onto Twitter to vent a little. My brother-in-law is trying to sell his rather unusual one-bedroom house in South London. It’s a converted garage formerly used by a local estate agent as a storage facility but five years ago converted into a one-up, one-down (but spacious) house in a back alley. Salubrious it is not, but it’s affordable by London standards at £270,000, which even in Croydon will only buy a small studio flat.

So, on the market it went, after he used a comparison app to find the best agent for one-bedroom properties in his postcode.

The weekend arrived and nearly ten viewings were organised and one offer came through at asking price. Then the problems started; after a second viewing the guy making the offer pulled out, citing ‘personal reasons’ but my brother-in-law suspects he had made offers via multiple agents on several properties and was hedging his bets.

As I said on Twitter, this minor episode (but major headache for my brother-in-law) is a nice example of the preposterous system Britain has laboured under for so many years.

Lively debate

My comments on social media started a lively debate – industry recruiter Graham Walker replied agreeing, saying, “The entire system – from legislation and process, agents’ qualifications, conveyancers, surveyors, lenders, land reg and local authorities – should be reformed. The duration of the selling process and general lack of accountability and professionalism is staggering and woeful.”

One point made by several people on the Twitter debate was this – whether offer-to-purchase should be binding and therefore have consequences for those who pull out. Having bought and sold a property in France and having spent time reporting on the country’s property market for several years, it’s an argument close to my heart.

It is a nice example of the preposterous system Britain labours under…

To summarise, buyers of French property must put down a relatively hefty deposit in order to secure a house or flat and, except under set circumstances, including having their mortgage rejected or a serious fault found with the property after offer, be willing to lose it if they pull out.

On Twitter some said the British system is better because it enables those whose lives change post-offer to pull out – such as those facing divorce or a serious health complication diagnosis, for example. Without wanting to sound un-empathetic, I have little truck with that point of view.

Our property market is dogged by this weakness in the offer/completion process – enabling gazumping and ridiculous changes of mind like the one endured by my brother-in-law, but repeated hundreds of times every day up and down the land.

I am somewhat baffled by Propertymark’s reluctance to tackle this – although it might reduce the number of people viewing homes and making offers, it would almost entirely eliminate fall-throughs, a problem grumbled about by agents all the time. The trade organisation’s best advice on this is to counsel buyers to ask the agent/vendor to stop marketing the property post-offer – and yet everyone knows few agents want to do this.

Standardising information

Industry-government liaison body, the Home Buying and Selling Group is doing its bit as well with the BASPI form which hopes to standardise the information collected by agents and conveyancers and therefore speed up the period between offer and exchange.

And there’s Trading Standards too. James Munro has been leading a somewhat heroic attempt to get more information in front of buyers earlier on too, including on portals. Although I report on all this with what I hope is professional detachment, on a personal level (i.e. on Twitter!) this all seems like fiddling about at the edges and not confronting the big problem my brother-in-law experienced.

By not making it financially painful to withdraw an offer, it opens the door to tyre-kickers testing out the market and wilfully deceptive buyers running multiple offers particularly in busy markets, along with gazumping of course. I am aware that Munro is toying with a £500 offer deposit, but it’s just not enough to prevent silliness, in my view.

Selling homes for agents and vendors alike is already a difficult process. I am baffled why more agents don’t press their trade association to something about it. I fail to see many losers if a French-style 5% deposit were introduced.

And, Mr Prime Minister or Mr Gove, it would be a nice example of levelling up!