/ 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

The sale of council housing by Mrs. Thatcher ensured victory at the polls, and in the short term was seen by many as a solution to first time home ownership. However, the small print was not so palatable – no more houses for rent traditionally financed by local councils. Fast forward to today; a major reason why house prices have skyrocketed beyond the reach of the next house buying generation, is that we no longer have a real choice between renting and buying – the rents charged, especially in our major cities are bordering on the horrific, surely one of the reasons why our brightest young brains are compelled to look elsewhere, often, outside Britain; and why overcrowding with a new generation of ‘Rachman’ (1960s, Kathy come Home scenarios) which was then followed by a surge of multi-storey flat building – currently demolished because they were built as cheap alternatives. Not what the French architects originally envisaged, a social environment coupled with innovative ideas for a safer, old age, and child friendly, responsible communal living. When is there another much needed ‘surge’ in affordable, well built, house building *both private and public enterprises) going to materialise, so our younger generation can begin to have a real choice, of affordable homes within reasonable distance from where they are employed. Not, of course, another cheap alternative that will be needed to rebuilt every few decades – this is the most expensive way of continuing this ridiculous and heart rending situation…

Alison Tonge says:
8 May 2017

An offer needs to be binding. You should not offer unless you can really afford it. Also a house should have only one survey. It should be standard for all lenders. My daughter has lost about £1000 pounds because someone down the chain pulled out resulting in her losing the house she really wanted. Now she has to find another house and pay for another survey as well as paying for the work the estate agent has already put in and is now wasted.

Your daughter should not be expected to pay the estate agents fees if the house sale fell through, only if you put your house back on the market with another estate agent and you sell it to anyone one of the people that your first estate agent introduced you to. I think this carries for a stipulated timeframe usually about 6 months.

The mortgage process should be set up to maximum 3mnths no more.
In our case the solicitors took 2 months to sort out parking space,when in fact it took us week to sort it out ourselves!
Solicitors and banks needs to be regulated.

Apart from Whisky, one other good feature of Scotland is house conveyancing. One simply puts in a sealed bid or agrees a price and the deal is done ! No loss of sale after weeks of waiting and no gazumping. Clearly, the only ones losing out are the solicitors, (so no tears there!). Why oh why do we not accept this form of transaction south of the border ? It would speed up sales and save on fees and uncertainty, whilst giving some level of respectability to the housing market.

How can you do this without the money to back up your bid (if you have not yet sold your own house to release the equity)? It seems to me until then you can make an offer but are not in a position to fulfill it.

Our experience is that many sellers are not ready to sell because there are important matters left to deal with during the transfer process, like wayleaves, eg water supplies and drainage, maintenance issues like septic tank certificates, house electrical safety certificates, rights of way eg shared drive issues, building issues eg building regs. certificates, window FENSA certificates.
These and a number of other things do not impinge on the necessity for a house survey which is the responsibility of the buyer only, but could be a standard requirement for the sellers solicitor to collect and be available in the sale details before an offer can be accepted.
We have had sales cancelled by the seller after considerable time and trouble for no visible issues, but we fail to suggest a solution to this problem; after all it can be the result of illness, family issues etc, but a pre sale solicitor could at least have to check that the owner’s’ have a correct title in order to sell.

I’ve lived in my inner London flat for years, so I’m lucky. But people like me (or younger relatives) can’t move here now. And I often see queues of people waiting to view the same flat – this is awful. Finally, can’t we all shut up about property LADDERS -never used before 1981 (in the Times) and now used by everyone? This seems to assume we all want house prices to rise continually, and most of us don’t.

Mirror the Australian system, I was an agent there for 15 years and only 3% of sales actually didn’t complete.
It also has a lot to do with the agents here. Commission based agents follow the process through to the very end and can keep track of the time line.
I have now opened my own agency and are using part of the system used in Australia, this cuts out the need for chains.
Solicitors also need to get on board with the process, 50% of sales fall over because a solicitor drags out the settlement.

How do you get rid of chains?

Live a good life? 🙂

Ewen Cameron says:
8 May 2017

House buying and selling is simpler and more straightforward.

I have twice found that the Land Registry records for property I owned and was selling had charges that should have been removed when I bought the property. In one case it resulted in the sale being lost. In both the cost was over £2000 to clear things up. In fact in one, the matter is not yet clear as it relates to a previous mortgage and lease and obtaining all the nformation required after twelve years has been difficult. In both cases the failure was a bank and conveyanciong solicitor. I recovered the costs in the first instance but haven’t yet for the second which is in progress. It is now six months since we discovred the problem,

I have given up hope of ever owning my own home I am 40 a single mum and I just cannot get any kind of mortgage. I have reached the point where I have moved myself and my daughter back in with my parents to try and get some kind of deposit together and frankly it’s depressing the hell out of me.

I purchased my present house almost seventeen years ago after much searching for a house that was virtually problem free, fortunately I was a cash buyer. But later on I had to give financial help to get our three graduate daughters into property ownership.

In rough terms around 40% of the cost of a house is land – or so I am led to believe. Many landowners benefit hugely from being granted planning permission in land price inflation. One way to maybe reduce house costs would be to limit the cost of the land, maybe by taking most housing land into public ownership at a compulsory purchase price not much above its non-housing value, and make this leasehold to the final purchaser of the house. Knocking say 30% off the cost of a house would be attractive, providing lenders made loan offers matching the reduced cost. We have to at the same time break the scarcity problem that makes us all fight over houses by offering more and more money.

R carr says:
8 May 2017

I recently worked at an agency head office, I’m shocked that’s it’s not regulated and still very much paper based

We’re in the process of moving at the moment. Not a long chain as we’ve already bought our new house a few years ago and just 1 buyer below ours. Everyone is ready to go and the thing that’s holding it up is Local Searches. These apparently can take up to 12 weeks in our area, which is absolutely ridiculous.

Our estate agents were really pushy regarding using their “in house” solicitors and mortgage brokers. To me they really shouldn’t be involved in this side of moving house, conflict of interest springs to mind. We already have our solicitor, and don’t need a mortgage so it was easy for us to resist, but it concerns me that anyone who is not so savvy and have no experience (we’ve done it 10 times) would just cave in and use the estate agents for the whole thing.

Yes the home buying / selling system is rank rotten but the planning system is even worse and making a new home both unaffordable and an unhealthy air tight sweat box.

Greg Russell says:
8 May 2017

Vendors should be made to pay for searches and a full survey to be held with a regulated independent third party. This would be available to prospective buyers. The cost could be shared at exchange or completion with the buyer. I feel this could accelerate the homebuying process.

Having had to deal on 3 occasions with the selling and purchase of property (1 house move and 2 experiences of selling in the role of executor) I have experienced some of the worst aspects of this process. I won’t go into the specifics of the individual circumstances, but there are a number of things which could be improved. There should be better regulation of the conveyancing solicitors to control the use of lenders’ “preferred” solicitors, who operate on a nationwide basis and appear to be the cause of most unexplained delays. It should be possible for the seller to dictate the number of days required between exchange and completion to prevent last minute panics. I tried to do this by having it written into the contract, but my expressed wishes were ignored. This meant that during a visit to a storage company I was told in a phone call, within a 20 minute period that “exchange was not likely to happen on the planned day”, to “anticipated exchange the following day” rapidly followed by “exchange and completion on the same day”. The storage company, who also handled some of the move were very accommodating, but the process cost far more than it should have done. All because the solicitor representing a seller further down the chain created problems for the whole chain. There is a big difference between the type of survey organised by a lender prior to granting a mortgage; a condition survey and a full structural survey. A full survey should only be done by a qualified RICS Chartered Surveyor and they are expensive. An RICS HomeBuyer Report starts from about £400 and this type of survey is usually sufficient for most properties. It still makes sense for the buyer to pay for the survey and if the whole process was better regulated most buyers would accept that this is fair. I think that a good estate agent, together with a good surveyor and a good solicitor can make the whole process work smoothly, but there have been so many new entrants into the market; from on-line agents, to an increased number of lenders, to conveyancers that it has become more fraught than it should be. The RICS and Which? have excellent advice on their websites, but not all buyers think to consult such a resource!

Examine the Scottish system of buying and selling houses it is fairer,quicker and easier.

Mrs Helen Hotson says:
8 May 2017

We bought our Victorian house 10 years ago and after we moved in we found that our solicitor had not done the local searches. The local solicitor in Bala also registered the property at Land Registry in 1996 but did not word the registration clearly. On our title deed it states a 10ft wide strip of land along the side of our house belongs to us but the local council are denying this. There is quite a wide area between us and the Cinema next door and the council have the right of way over all the area but state it includes our 10ft wide strip. Our guests and some of the residents along our row park their cars on this strip of land. We decided to turn the house into a B&B which has been very successful but now would like to sell it as such but without the problem being resolved there is not much hope of a successful sale.

The time taken in home buying/selling relates not to government or legislation but our consumer protection culture. Solicitors and conveyancers (I have used both) are so obsessed to cover every aspect of their backsides that they insist on surveys and checks which are frequently meaningless and shallow in exposing the real aspects of the property but take time for the ‘professionals’ to prepare the reports which are largely boiler plate stitched together in a word processor. To improve the time you will have to change the culture which starts with the nit picking attitude of mortgage lenders protecting their own money.