/ Home & Energy

Why is homebuying such a headache?

homebuying

Buying and selling a home is stressful. It can be a long and uncertain process full of pitfalls. But with homebuying or selling being cited as one of the top consumer concerns by younger people, is it more demanding than it needs to be?

Buying a home is a big decision at any age, but it’s probably the most significant purchase a younger person can make. It can be a roller-coaster of emotions: hope, anticipation, disappointment, anger, sadness, and hopefully, at the end, joy.

Last summer, we heard from frustrated homebuyer, Polly Freeman, about her terrible experience of the home buying and selling process, and a number of you identified with Polly’s story.

Home headaches

In many ways, it isn’t surprising that it’s such a stressful life event. Homes are expensive and the stakes are high. More than just bricks and mortar, you are investing in your dreams for the future.

But with half (49%) of 18 to 34 year olds ranking homebuying and selling as one of their top three consumer concerns, does it really have to be this way?

Consumer Agenda Housing

Which? research has shown some of the challenges homebuyers and sellers face. Three in ten (28%) house purchases fall through and it takes on average four to five months to complete a purchase. That’s four to five months of mental anguish.

If your purchase collapses, you could face being out of pocket by an average of £2,200, with nothing to show for it. For first-time buyers who’ve spent years saving deposits, that is a huge blow to accept.

Time for a review

Everyone has heard nightmare stories about long purchasing chains collapsing after months of negotiations, unreasonable price-hikes at the last minute before contracts are exchanged, or dealing with professionals who demand generous fees but do little in return.

No one would design the system in its current guise. So, it’s time to fix the flaws that leave too many people buying or selling a home angry and frustrated.

That’s why we’re calling on the next government to review the home buying and selling process and make it better for consumers.

In particular, we want the government to consider how to make the conveyancing process simpler and how to help consumers make more informed choices about the professionals they use when buying or selling a house.

So, how would you rate the current homebuying and selling process? How do you think the processes could be improved?

Comments
Member

In an earlier Conversation I reported that an estate agent was using a guide price range for many of the properties on its books and a friend had their offer near the bottom of the range declined, even though there were no other offers. I don’t know if this practice is common but it is certainly not helpful to buyers.

Member

Many properties can be difficult to value when there have not been similar ones recently sold in the area, and even “common” properties will be valued in relation to others that have sold – in other words houses will sell for what someone is prepared to pay. It is the sellers prerogative to get the best price he/she can for their property – why would they do otherwise? It is there biggest asset in which they have invested a lot of capital and, probably, labour. If an estate agent puts a guide price range on a property it may be they hope, as in an auction, to attract viewers leading to higher offers. Nothing wrong with that; no one is forced to accept any offer that has been made.

Member

Most vendors advertise at an optimistic price and wait to see what happens, sometimes waiting a long time. I believe that it should be illegal to advertise a guide price range and then refuse to accept an offer in that range. In the case I refer to the vendor did not say they wanted to wait a month or two to see if better offers turned up.

Member

Why should it be illegal to advertise your own property at any particular price you choose and turn down an offer? That is your freedom of choice – it’s your property. Legality should only enter in to this when contracts are involved – as it does. Auctions use guide prices but often items sell above – the value is what someone is prepared to pay. If the guide price is lower than the expected value then you’ll expect by tempting people along the value will be recognised and an appropriate offer forthcoming. If not, then the seller might have to reconsider the valuation. Pricing can be about tempting people to look. I’d rather we tackled real illegality – retailers abusing the Consumer Rights Act for example.

Member

It’s not illegal Malcolm but buying a house is enough of a challenge without some standardisation of practices. An auction is completely different.

Member

If you are buying on a tight budget, good practice is to start with an offer below, but not too far below, the asking price.

Then the real price negotiations can begin.

Estate agents, who earn a fee if a sale is agreed, have a strong incentive to help steer any such negotiations towards an outcome that both buyer and seller will be reasonably happy to accept.

When you see houses being offered for sale at obviously inflated asking prices, there may well be a back story as to why the asking price is high. Any buyer looking for an easy and good value purchase may be well advised to steer well clear of any such properties.

Member
David Harwood says:
10 May 2017

Solicitors are greatly to blame, they take there own sweet time and put the blame on others.

Member
Wyn Baker says:
10 May 2017

I feel that if buyers have proof of finance/ mortgage offer when making the offer, this should be mandatory. Once offer accepted a non refundable deposit of, say, £1,000 should be paid by buyer. Only refundable if structural damage or suchlike is discovered.. Once paid, sale agreed and if seller gives back word, then substantial compensation is due to buyer! There you go!

Member
Blod says:
10 May 2017

A lot of young people are not willing to start at the bottom of the housing ladder. They want large modern detached houses with all mod cons, and still want new cars, foreign holidays, and life as it was before they decided to buy a house. In my day it meant buying a small starter home, taking cheap uk holidays, or staying home to do DIY, no eating out, new cars or any extravagance for a good few years. If you were able to take on an extra job too, you did it. AND the mortgage rate was at 15 percent! We just put up with it to get on the ladder.
We started small and WORKED our way up to bigger houses. There was no bank of mum and Dad either. You saved your earnings for a deposit by sacrificing other things. Now we are told that WE are the selfish generation! Ha!

Member

These days some people seem to have a much greater sense of “entitlement”. In my day we seemed to have more of an ethos of having to work for what you wanted. maybe it was the lack of the easy credit we have today.

Member

I would class myself as one of the old school but would like to point out that in real terms, many goods and services are much cheaper than they used to be. It’s risky to over-stretch yourself with a mortgage but if you are fortunate, the larger house might prove to be a good investment. As Malcolm says, credit is easy to obtain and I get the impression that younger people are happier to take risks.

Member

And maybe we have more of a thought that “we only live once”? Is that a product of worldwide uncertainty, terrorism and the nuclear threats?

Member
david foulstone says:
15 May 2017

The trouble is that there is no “bottom of the housing ladder”.
Since the Thatcher block on Council house building, and restriction on local council’s control on the type of houses being built, the major property developers have concentrated on the lucrative middle income market and let the lower income house seekers go to hell. Don’t blame the young people. Blame the present Conservative government’s support for its middle & higher income supporters, and resultant highest ever level of personal debt among young people in living memory.

Member

Unless you move to Scotland David , council house sales ( to the present council rent payer ) have been stopped by Scottish Government legislation and an imposed policy of forcing local councils to build a certain amount of council houses has been in action for a long time all for the benefit, as you say , of helping young people get off the bottom rung of the ladder by saving up while they are council tenants . A large number of people from England have “migrated ” to Scotland where the social conditions are more favourable -re- no university fees/ prescription fees etc etc and , funnily enough they dont vote Tory but SNP its the Labour supporters who have now changed to voting for the Tory Party – disillusioned by the Labour parties “antics ” there .

Member

I seem to recall there were thirteen years of Labour government between John Major and David Cameron when council house sales could have been stopped, councils could have been allowed to build again, and the railways could have been renationalised. Ooops! That’s a different Conversatio!

Building new houses for more affluent homeowners releases cheaper houses elsewhere in the market, the prices of which are not inflated by excessive planning and building requirements.

Member

On the other hand, it’s first-time buyers that would benefit most from new, energy-efficient housing that is unlikely to need any major expenditure in the immediate future. Those who are more affluent can afford to have older properties properly insulated and otherwise improved. Furthermore, building starter homes makes better use of land. You have previously commented that the cost of new homes is pushed up by a variety of additional features to make them look attractive. With starter homes, there might be less opportunity for this, if only because many struggle to raise the deposit for a mortgage.

Member

I am certainly not against building starter homes, but at £150,000 it is difficult for young people to buy them. There are, however, lots of small homes on the market in our area at £60,000 upwards that can usually be upgraded and some have already had improvements carried out. My discussions with young people suggest that they just want a place of their own to start with and don’t mind if the front door opens into the living room, there is no garage, there are only two bedrooms, the bathroom is downstairs at the back, and the garden is just about big enough to keep six chickens in. It’s a home, and they can save up for something better. It is probably the case that most people start home ownership in a small flat and the ‘affordable’ homes are actually bought by second- and third-time buyers or first-time couples with well-paid jobs. Energy-efficient housing comes at a considerable capital cost that is reflected in the monthly mortgage payments. In my book this is another case of the best being the enemy of the good. I think the brand new low-maintenance, energy-efficient, well-insulated, all mod cons, wheelchair-accessible, centrally heated, double-glazed, cheap-to-heat and draught free houses should be reserved for elderly people downsizing from bigger and more costly accommodation.

Member

I think you win that debate, John. 🙂 No wonder people struggle to get on the property ladder.

Member

My first house was a bit of a wreck. As I could afford it I demolished an awful front window/porch, knocked two rooms into one, built a landing to keep the two bedrooms private, fitted new window frames, reroofed it….. Whilst having a full-time job. I sometimes think when we want more houses for first time buyers they expect the full works to be affordable.

Many parts of the country still seem to have houses that can be upgraded and act as stepping stones gradually to what we aspire to – if we make the effort.

I’d like someone to tell us what a very basic house could cost, without the land – labour and materials. Self build or commissioning groups were once in vogue – do they still exist? What they need is land, and local authorities have the power to decide where you can build so should be able to provide it on a long term lease to keep costs down Are there enough people who are prepared to put in effort and help themselves?

Member

I cannot understand the current philosophy of building council housing for rent with a view to then selling it to the tenants at a subsidised price when their are others in need of a rental home. I might have misread what is proposed. Council housing should be made available for those genuinely in need and if and when their circumstances improve they are expected to move to allow another needy tenant to take advantage of subsidised housing. We should be building up the stock, not selling it off – providing it is to help those in need..

Member
Rev Ruth Farrant says:
10 May 2017

My sister, in her late 70s has just sold and bought within 6 days! There can be no backing out now and they will move at the end of July.
If this system can work in one Commonwealth Country Canada, why can’t we adopt this, and cut the strain! What causes the desperate anxiety is the knowledge that even when the boxes are packed, the removal van booked and all arrangements made, either the buyer or seller can pull out, right up until the day of moving!

Member

. . . . but for the buyer not without losing their 10% deposit and legal and agents’ fees; that could be a £30,000 hit on an average-priced property, so not done lightly. There is also a risk of litigation for breach of contract if the seller cancels the sale and the legal consequences ripple up and down the chain. At least the part of the process between exchange of contracts and completion does seem to work. The implications of default do seem to concentrate the minds in that final period since a complete collapse very rarely happens but when it does it must be a catastrophe for everyone involved. Whether the professionals can pull a rabbit out of the hat in the form of some bridging finance and side-stepping manoeuvres I don’t know.

Member
Debbie says:
10 May 2017

Home buying is stressful because there is no commitment to go through with the agreement. We waited for a buyer in the chain for 5 months whilst he changed his mind over mortgage products, our buyer eventually went back on the market resulting in us losing the apartment we were buying. Wasting all our search & survey fees, our time and the property we wanted. An offer should mean a commitment to buy, with a time restriction!

Member

What happens if a buyer pays a ‘commitment to buy’ fee and the vendor applies delaying tactics and/or refuses to commit to move?

In such a situation (as I found myself in) it should be a legal requirement the that vendor be given, say a 3/6 month moving on period of time to go, otherwise the buyers fee is refundable. This may incentivise all genuine buyers and sellers, also their solicitors, surveyors, mortgage lenders to get on with the transaction within the allocated timeframe and discourage all ditherers and time wasters involved from holding up the whole process with all the misery that ensues.

Member

@dieseltaylor

There are lots of accusations of solicitors holding up the selling process. Would you like to list all the things a solicitor might have to do for buyers and sellers from your point of view?

Member
Patrick Taylor says:
12 May 2017

I don’t really have the time to do an exhaustive reply however one important distinction is what buyers of their own free will are happy to go with, and then the situation if a mortgage company is involved.

You may understand that the recent action of the Nationwide on no longer lending on properties with onerous terms embedded into the title. You may be curious as to why now, why only the Nationwide, and what were solicitors saying to clients about these onerous clauses.

We know from an insider that national famous name builders have been “introducing” buyers to solicitors claiming they are independent.

Obviously there are many fingers in pies here and the absence of an investigative Which? can only be deplored. So the first stumbling block would appear to be solicitors/conveyancers whose interest in the buyer might be desribed as cursory.

Turning to solicitors not in thrall to builders or estate agents we then have honest ones wrestling with a messy system and perhaps ticking boxes rather than thinking. This may because of a junior level dealing with the transaction and fear of an overseeing solicitor.

We had queries about our right of way over a Council owned pavement. I must admit I thought LR plan and local searches would have made it very obvious it was owned by the Council. Rather curiously we were asked about flood water drainage which is perfectly understandable given how the Govt and councils have allowed so much to be built on flood plains. However we are several hundred metres up on the edge of a chalk plateau which must be the least likely place to flood.

There are in many leases mentions of old covenants which in theory are enforceable but for the original freeholder or successor in title being long gone. A nice little earner is for the buyers solicitors to insist on an indemnity policy to be taken with an insurer for the benefit of the mortgage lender.

When I was dealing with solicitors enquiries as the managing agents for a block I was often shocked by the apparent disinterest of the solicitors in the state of the finances or committed expenditure due. I shudder to think of the quality of the advice and information provided to buyers of flats.

Oops sorry I am getting into the detail. My current conveyance is going along very well. As fortunately we are in email contact with the purchaser and our solicitor so we can up-date each other with what is going on. This leaves small opportunity for the solicitors to blame clients for not providing stuff ASAP which I think helps greatly.

The only hiccup was the tardy surveyors and that may have been the mortgage company being slow . and Easter and Bank holidays.

Could we have been more organised and made up all the important details into a pack. Yes I think we may have got there but achieived an offer in two days so we never had the time. But that is perhaps a weak excuse as given the long term plan all the rlevany stuff could have been stored in a case for the day! : (

Member
Brian Laidler says:
11 May 2017

I have recently move from Surbiton to Teignmouth in Devon and it was not painless experience. It turned into being a simple process, according to information from agents, between 3 parties , our buyer, ourselves and the seller. It eventually ended up with a chain of 6 properties all with various problems with the sales, leases etc. I don’t think any singe estate agent was responsible for misinformation but it was the lack transparency on the part of buyers and sellers. I originally settled for a house in Exmouth but this buyer backed out at the last minute, due to lack of progress within the chain. This meant a loss to me of £1,600 for legal fees and surveys. We eventually moved about 6 months after we had an acceptable offer for our house, during which anyone could have dropped out at any time.
I believe that moving house is such a dreadful experience in England that when eventually the move takes place all parties are so relieved that the don’t want to even talk about it any more, so the system continues with all of the inherent inefficiencies left in place.
I have bought and sold houses in England, Canada and France and I must say that England is by far the most inefficient and therefore the most stressful. However, I have no reason to criticise the people involved in the process but the “system” is very inefficient. Possibly two major changes could be implemented as follows:
a) All buyers should have a mortgage in place for the price of the property they are looking for.
b) There should be an initial deposit with offer which of course would be subject to survey and only refundable if major problems are uncovered, not the wrong colour curtain rods.

Member

We were let down by two buyers in Cambridge where prices are very volatile and it took us 9 months to complete the sale of a standard family home with no complications. The problem is that BUYERS have no risk if they walk away after months of prevarication. The government MUST make buyers pay a nom-refundable deposit if they renege on their accepted offer without just cause… otherwise nothing will change.

Member

This happens at exchange of contracts. when the formalities are completed. If someone prevaricates they might not be the right buyer – we need to use our instincts. Certainly there is no reason to take a house off the market until a buyer who is in a position to purchase without complications comes along.

Member
Andreas says:
12 May 2017

We’ve been trying to sell our house for six months with no success; my German wife cannot understand the British system; she tells me she sold her house in Germany within days. We should learn from places like Germany where the buying & selling of houses seems to be much simpler and quicker.

Member

What is the German system?

Member

Its a lot more direct than this country Patrick Taylor , which is actually the “odd man out ” in its house buying process , this applies to other European countries as well but to give you an idea have a read of Americans viewpoint of house buying in Germany : http://www.howtogermany.com/pages/housebuying.html or : http://www.expatica.com/de/housing/Buying-a-German-property_100945.html I can supply direct contacts inside Germany as one of my browsers has a German search engine ( but some uRL,s are in German )

Member
Member

Indeed, but I am not surprised. In the UK the Right-to-Buy led to the Buy-to-Let. Tenancies from private landlords probably outnumber those of municipal and social landlords now. What happens when people retire and can no longer afford to pay the rent?

Member

Buy-to-let remains popular despite the introduction of additional stamp duty last April: http://www.thisismoney.co.uk/money/buytolet/article-3882228/Buy-let-QUARTER-property-sales-summer-says-HMRC.html

In some areas, buy-to-let is mainly long-term lets but there has been a considerable growth in self-catering holiday accommodation, often targeted at wealthy retired people.

Member

If you add the annual nett income [4%] to the capital appreciation [5%] – these are conservative figures – the return is probably the best available even after tax. CGT or IHT will strike hard when the properties are sold but even that can be managed down through careful planning.

Member
Ian Burden says:
16 May 2017

We have recently sold 2 properties. The first sale went through conveyancing unto exchange when toe buyer ;lowered his offer by 10% which we refused. An email to the buyer’s solicitor, copied to us in error, revealed he had offered on 2 other properties as well!

The second property the buyer is delaying exchange despite all being in place for weeks.

It is our opinion that buyers should have to show commitment by way of a non returnable deposit.

Member

There should be some form of restriction on buyers still exploring the market after making an offer on a property and having it accepted – that certainly shows a lack of commitment. Dropping the offer for no substantial reason is also bad faith.

Sellers can procrastinate as well, Ian, sometimes because of a problem in their buying chain but also because they have not sorted their logistics out.

I agree with a non-refundable deposit but it should apply to both sides.

Member

My buyers could have gone into rented accommodation and reaped the benefit of the appreciation on my house which is now worth another £40,000 at today’s market price,

They eventually bought a similar property and paid the extra £40,000. Had they gone into rented for about
6 months they could have saved themselves at least £34,000 which they would have recovered had they bought my house at the original asking price which I was quite prepared to do at the time.

Renting was not an option for me at my age so decided to remove the house from the whole unscrupulous and corrupt procedure and stay put.

Member
Mrs W.M. Dowse says:
29 May 2017

We got to the day for exchange of contracts and the people at the bottom of our chain of 6 pulled out. This left the rest of us still wanting to buy/sell, but unable to progress. When contracts are exchanged, everyone is legally liable for 10% of the agreed price of the property they want to buy if they pull out without reasonable cause. This idea of a ‘virtual’ but legally required deposit should be part of any house purchase as soon as the price is agreed. If everyone were required to pay something once their offer is accepted, it would stop time wasters from leaving everyone else stranded by pulling out just before exchange. Under normal circumstances, the financial liability is paid at completion, but if real money was required by time wasters, they would perhaps think twice before setting off. Having to start afresh with surveys and searches is not cheap and is especially annoying when someone else was to blame.