BLOG: Upfront information DOES cut conveyancing, says industry senior

The UK’s property market is at a pivotal juncture. Recent enactments of Consumer and Business Protection Regulations (CPR and BPR) are not just altering the legal framework but are setting the stage for a revolutionary trust-based model that could potentially redefine how conveyancing is completed.

Companies that operate on the principle of mutual benefit and trust, symbiosis, and put the consumer first ensuring all parties involved in the property transaction process benefit equally and ethically can change the way the property market works.

TRANSPARENCY AND FAIRNESS

For decades, the UK estate agency sector has navigated through a landscape dominated by traditional players and practices, many of which have not kept pace with consumer protection needs or technological advancements.

The introduction of CPR and BPR is a response to these growing demands for transparency and fairness, aiming to eradicate misleading practices and foster an environment of trust.

One of the most significant implications of new legislation is its challenge to ‘subject to contract'”

One of the most significant implications of new legislation is its challenge to the longstanding ‘subject to contract’ norm, which has traditionally served as a safety net allowing either party to withdraw without consequences prior to contract exchange.

The evolving regulatory landscape are catalysing a shift towards transparency and preparedness at the initial stages of a property transaction.

With the introduction of more comprehensive pre-offer contract information it becomes both logical and practical for potential buyers to review contractual details before making an offer.

ALTERS DYNAMICS

This shift fundamentally alters the dynamics of property buying, moving away from the ‘subject to contract’ safety net to a more informed and decisive early engagement.

Prospective purchasers are encouraged, and increasingly expected, to engage qualified conveyancers to review all pertinent details of a property upfront, thereby reducing the likelihood of sales falling through due to unforeseen complications discovered later in the process.

This shift suggests a move towards a system where upfront disclosures become the norm.”

This paradigm shift suggests a move towards a system where comprehensive upfront disclosures become the norm, reducing the reliance on the traditional ‘subject to contract’ clause.

This raises important questions for legal frameworks and industry practices: if ‘subject to contract’ becomes obsolete, what mechanisms will serve to protect both buyers and sellers in the new landscape?

ROBUST DISCUSSIONS

This transition is set to provoke robust discussions among legal teams, conveyancers and industry regulators about establishing new norms that ensure fairness and flexibility, while also enhancing the efficiency and reliability of property transactions.

As this conversation evolves, it will be crucial for all parties involved in real estate to adapt to and shape the emerging standards that will define the future of the industry.

It is most likely that new entrants will step into this paradigm shift.”

It is most likely that new entrants will step into this paradigm shift. Existing players have shown themselves unwilling or unable in the past to change how they operate to ensure their position is protected.

This paradigm shift can only be brought about by the creation of a unified industry standard that can be owned and directed by the stakeholders themselves.

This initiative not only supports compliance with new regulatory requirements but also promotes a collaborative framework where competing service providers can coexist and prosper.

INFORMED CONFIDENCE

By facilitating a platform where information and services are shared rather than withheld, we can ensure that agents, buyers, and sellers all operate from a place of informed confidence.

In 2019, responding to pressing consumer concerns highlighted by activists and lobbyists from the National Leasehold Campaign – regarding properties with flammable cladding and leaseholds with onerous terms – we recognised a critical gap in the estate agency sector’s adherence to the CPR.

It became evident that estate agents were often providing insufficient information.”

It became evident that estate agents were often providing insufficient information for consumers to make fully informed decisions about viewing, offering, and purchasing properties.

To address these deficiencies, we developed and implemented a system which integrated multiple service suppliers into a unified platform that prepared properties for the market from day one. This system not only ensured properties were contract-ready immediately but also significantly improved the efficiency and reliability of the transaction process.

CONVEYANCING TIMES

During an initial trial, the system was tested on 1,500 property completions, which substantiated the theoretical advantages of our approach. The trial demonstrated a reduction of at least three weeks in conveyancing times, while also cutting down the overall property transaction cycle by an average of eight weeks.

Notably, this led to fewer sales falling through – a perennial problem in property transactions. Consequently, agents who used our system saw an increase in revenue and a notable rise in market share – from 19% to 37% of all completions in the trial area.

This marked success highlighted the tangible benefits to all stakeholders involved in the property buying and selling process.

Robert May is Advocate for Agents at MySSTC