Local searches must be mandated at agent instruction, says Connells Group chief

The glacial property sales process in England and Wales needs only one major change to bring significant benefits – to get local searches started at the point of estate agent instruction, Britain’s largest estate agency has told Government officials.

Connells Group, which has some 1,300 branches, says that during recent discussions with MHCLG officials it called for this to be mandated as part of their looming reforms to the housebuying process, something the compnay has tried successfully with one of its agencies.

Following two consultations, Labour’s reforms have now been given a roadmap and guidance is expected imminently that will put them into practice.

“Getting local searches completed earlier would transform the process at one stroke,” says the company’s Chief Operating Officer Chris Rosindale (main image).

“We know because we did a trial with our 30-branch Welsh estate agency Peter Alan using the National Property Transaction Network (NPTN) we’ve set up with LMS and Lloyds.”

This saw some 4,000 vendors offered the NPTN digital route of which half took it up. Among those transactions there was a 43% lower fall-through rate while transactions were 37% faster [instruction to exchange].

The reason for these improvements is clear to Rosindale, who points out that under the current system, vendors don’t instruct solicitors often until a week after they’ve signed up with an estate agent and that then, many solicitors don’t order local searches until the mortgage offer is in. Also, depending where the property is, the searches will take up to a further six weeks to complete.

Digitally ready

“With NPTN, we get the vendor digitally ready at the point of instruction but we cover the cost of the local searches for them and take the risk – so if they don’t move we absorb the cost,” he says, adding that it is this that he believes saw the dramatic reduction in fall-through rate and increase in speed.

“We’ve seen that all fall-throughs occur during the final six weeks [prior to the planned exchange] and by starting the local searches earlier on, this period during which everyone’s nerves are getting more and more frazzled, is avoided,” he adds.

Rosindale also points out that the economics behind this are stark – by returning to a sales market of 1.5 million transactions (that the industry used to enjoy) both the economy and estate agents will be winners, as will the Government via higher Stamp Duty revenue. This year the market’s on track to deliver 1.1 million transactions.

“LMS is incredibly important in achieving this difficult task because unlike other attempts to bring the industry together to improve the process, LMS already has 96% of UK conveyancers and half of the UK’s lenders as trusted partners – the only gap here is that we need to get more estate agents involved, and I’m involved in efforts to achieve that,” he says.

“The corporates like us will play ball because we see the benefits but it’s the 74% of the industry that’s independent agencies that are crucial too.

“We’re already seeing some great results – we just need more estate agencies on the NPTN platform.”

Main image: JLL/Connells