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Homebuying: a process far from easy

house buying

Last summer my husband and I decided we‘d like to move house. After having a relatively smooth experience as first-time buyers we hadn’t anticipated what was in store for us this time around…

We started to look for a new home. Feeling a little anxious about marketing our house too soon, as being in a sought after area we were sure it would be snapped up quickly.

But we were encouraged to put our home up for sale as we were told any offers we made would not be taken seriously unless our house was sold.

Well our house was sold within two weeks of it being on the market, so the race was on for us to find a new home.

A race to buy

Over the next three months we made offers on four properties before having any success.

On the first property, we offered full asking price for a property but the seller became completely uncontactable. On second property, the vendor decided to rent out the property, completely unbeknown to the estate agent.

Then on our third attempt, we offered full asking price and stressed that we’d be willing to negotiate. We were later told that the property had been sold, with no opportunity to increase our offer.

During the time it took to find a property, prices were increasing weekly and with an offer already accepted on our house, we were left with less and less to spend.

Luck of the draw

Finally, around four months into the process, the estate agent we’d sold our house through called us to tell us they’d just had a house come onto the market that they thought was perfect for us. Jumping at the opportunity, we went to view it that evening.

We made an offer there and then and the offer was accepted the following morning.

Nobody else was given the opportunity to view the property, which was lucky for us, but again shows how unfair the property market is.

Our purchase was completed three months after having our offer accepted. But we had yet more trouble and stress with the conveyancing.

The house we were buying was a probate property, so we expected a little hold-up. We were prepared to wait but didn’t expect the process to be nearly as long and stressful as it was.

Initially we were told by all parties solicitors that all conveyancing would be completed in advance of the probate being completed, so once probate was done the purchase would be very quick. This was far from the reality of it. Probate was actually completed eight weeks into the 12 week process.

A story far from unusual

But we’re now seven months on and are happily renovating our new home, breathing a sigh of relief that all of that stress is over. But when we chat with friends and family about our experience, however extreme it felt, sadly it’s far from unusual.

So have you recently experienced home buying or selling? How did you find the process? Did you find anything particularly complicated or stressful?

This is a guest post by Polly Freeman. All opinions are Polly’s own and not necessarily those shared by Which?

Comments
Member

Isn’t it time there was more protection for both buyers and sellers?

I have often thought both buyers and sellers should deposit say £10,000 with a solicitor or estate agent which they lose to the other party if they pull out of the sale for any reason other than an unfavourable survey.

Both parties would get their £10,000 back on completion or the injured party would get compensated.

In Polly’s case, if offers had been accepted, she could have been £30,000 better off.

Member

Whether you are selling or buying there can be a long wait between acceptance of offer and exchange of contracts during which either party can abandon the transaction with no adverse consequences to themselves. This causes undue stress because the seller is wondering whether they should have kept the property on the market and the buyer is anxious that the seller might have second thoughts or cannot proceed because of a problem in the upward chain. Local authorities are generally turning local searches around in a week or so yet they are commonly and wrongly blamed for delays. Mortgage approval can take much longer than it should, even when prospective buyers have a ‘mortgage in principle’ certificate. A valuer has to inspect the property and report back but that is not necessarily the cause of much delay – the internal administrative procedures of the lender seem to be a particular problem. I believe the main difficulty to be inherent in the chain of transactions whereby no one can progress to the next step until the one ahead has done so. Although it is highly debatable, on balance I tend to think selling first gives you the best chance of being in a commanding position.

I think Alfa has made a good suggestion that would concentrate minds wonderfully. I think the sellers’ agents were at fault in Polly’s three failed purchase attempts, albeit not legally so. Agents really must have a clear and committed understanding of their client’s position for which they should, to some extent, be accountable. The idea that – without repercussions – the seller can just go out of contact, or that the owner can just stop a sale and rent out the property, or that the seller can just do a deal on the side without involving the estate agent, is unsustainable. Such actions need to be regarded as a breach of contract between the seller and their agent and should require the agent to obtain suitable assurances from, and lay down obligations on, their client when accepting instructions so that the agent becomes party to the default. Taking a bond would certainly sharpen up the process.

Unfortunately, when we buy property we cannot choose the agent and I have heard many stories of deficiencies on the part of the selling agent. Agents do have a duty of care to the buyer but it is not as strong as their obligations to their instructing client and the duty is barely enforceable. When you instruct an agent to sell, a senior representative deals with you professionally and generally looks after you quite well; as soon as an offer is accepted supervision of the the transaction passes to a progress-chaser in the office and junior staff tend to handle all the calls from the buyer and concentrate on soothing them rather than telling the whole truth. The progress-chasers like to make themselves useful by frequently bothering the conveyancers over progress details so that they can appear efficient to both the seller and the buyer, but it is a façade and adds little or no value to the process in my opinion. Estate agents seem to have created this function for themselves in recent years and now they all do it. However, managing the chain is vital and left to conveyancers it might be even worse so something that galvanises the various parts of the process as Alfa proposes might do the trick.

The ideal chain has a first-time buyer at the bottom and a new-home buyer at the top and no intermediate transactions, but that is exceptionally rare, and even then things can go wrong if the first-time buyer hits a mortgage snag or the new-home buyer’s builder has not finished their property as scheduled, but at least there is usually time in such a short chain for people to wait without affecting anybody else. As soon as intermediate transactions are stirred into the mix the potential for something to cause a hold-up increases. Creating more new homes to buy, and enabling more first-time buyers to move, are absolutely fundamental to lubricating the housing market and no other remedy will work as well as that.

Bonds that bind sellers and buyers are all very well and good but there has to be room for the unexpected and there have to equitable exit routes for people caught in an impossible situation. We were selling a property when the buyer died suddenly [thank goodness it happened before the exchange of contracts or we would have had to proceed at the executor’s pace on behalf of the estate]. Structural damage can occur, all sorts of misfortunes can befall, and it is impossible to legislate for all eventualities. But there has to be something to stop the capricious from mucking up an otherwise perfectly good transaction.

For Polly to get the purchase all wrapped up within three months of acceptance of their offer is good going these days, but four months were wasted due to unnecessary, and preventable, flaws in the system.

Member

When talking this over with an estate agent friend the other day he confirmed that the biggest problem by far is the fragility of the chain. One problem in one link simply affects all the rest. They see no easy answer to this. You need to live somewhere, so can’t move until another house becomes available so if your move is frustrated you need to take other measures. Moving into a rented property if you can’t move on with your chosen purchase both costs money in rent for a contracted period and risks a substantial rise in purchase price in the interim.

Member

Absolutely right. People who move temporarily into rented property tend to also put a lot of their household goods and furniture into storage at additional expense and I suspect that most are in rented accommodation for much longer than they anticipated. The proceeds of their house sale will not appreciate at the same rate as the value of their next property will rise.

I see signs that a lot more new apartments are coming onto the market in Norwich as empty commercial office blocks are being converted into residential accommodation. That will help one sector of the market but there still seems to be a dearth of desirable new-build properties for people to buy and I think local councils have a lot to answer for here with their petty objections to developers’ designs and insistence on onerous obligations. I was talking to a local councillor and he was chuffed to bits that the planning committee on which he served had turned down a scheme because it featured ‘blind windows’ on end elevations [i.e. looking like former windows had been bricked up] which he said were not part of the vernacular building style. Well, in the first place there are plenty of local examples on very old houses where some windows were filled in to avoid the window tax, and in the second place why on earth is the council worrying about such a minor architectural detail in an otherwise attractive scheme?

Member
Lisa says:
4 June 2016

We were due to complete on 14th November, same day, someone was murdered in house directly opposite ……. we halted proceedings, eventually went ahead with purchase

Member

The whole business of buying and selling houses has become a racket where a whole swarm of professions are milking the hapless participants for what they can get. The government are raking in VAT so they turn a blind eye. As someone commented, if the buyer needs a mortgage then it gets a whole lot worse.

I should have thought citizens should require authorities that will look after them. Instead, buyers and sellers end up hating each other, egged on by the solicitors to engage in a sort of battle. Unfortunately I can’t offer an alternative.

A lot of the problems arise from the time the process takes. One step in the right direction would be arrange things so that the longer the professions take the less money they get. If the sum total of the fees starts where is does (about £25k) and then dwindles by 10% of the original amount (£2,500) each day until the houses are exchanged, I am sure that they would, for example, start using emails and stop practises such as second class letters or sitting waiting for hours connected to call centres whilst their clients rake up hourly fees.

Member
Robin Butler says:
6 May 2017

HM Land Registry was set up decades ago to simplify property transactions As a young conveyancing clerk at the time, after completing the traditional paperwork, I had to register properties with this new Registry. More than 60 years down the line, transactions seem to be no simpler, just as time-taking as ever, and several times more expensive! I think we can lay this at the door of the solicitors, whose vested interest in property transfers is guaranteed to spin out the process as much as possible, find every nit-picking reason to multiply the amount of work involved. To misquote Parkinson: “Work expands to accommodate the amount of money required for its completion.” In the old Soviet Union, people could complete the paperwork to buy and sell homes by filling in a simple form at the post office! I don’t think we need to become a Marxist state in order to find a way of streamlining this process.

Member
Peter McGurk says:
9 May 2017

Tell me, what VAT revenue is charged on house purchase?

Member
Ian C says:
4 June 2016

Our experience of housebuying over the last couple of years is similar to Polly’s. One purchaser of our old home dragged out the conveyancing process, and then pulled out without explanation the day before exchange, so breaking the chain for several other house movers as well. In the end we moved into rented accommodation in our chosen new home area, so we could be “on the spot” when properties became available. After several months in a very competitive area, and with cash in the bank, we were able to secure a home even before the agent had finished drafting the property details or it had appeared on the open market.

If a third of house transactions fail, this causes unnecessary problems ror thousands of unrelated families up and down the “property chain”, through no fault of their own. So I would like Which? to start campaigning for the government to change the conveyancing process in England & Wales closer to that in Scotland. I understand that north of the border the purchaser has to provide a structural report on the property and the equivalent of local searches as part of the house marketing process. The potential buyer is thus in possession of all the relevant information to make an informed offer, and can get a “firm offer” of a mortgage to reassure the seller. As a result exchange of contracts happens almost immediately, and legal completion is generally only a few days later. As a result I understand that very few chains break, and there is a lot less aggravation all round.

Such a change does some drawbacks, and care will be needed to ensure any reformed system minimises these. The key one is that the seller would have to spend more time preparing and paying for the structural survey and local searches ahead of starting the marketing of the house. The experts preparing the surveys would have to prepare their report for an unknown potential buyer, even although instructed and paid for by the seller. But this already happens with the EPA energy report, and estate agents have to give an accurate and fair representation in their marketing details. The professionals involved would almost certainly raise objections, as potentially the number of transactions (and thus their fees) would probably fall as “broken chains” declined.

At the moment the current system is stacked in favour of the seller, with the purchaser having to make an offer “subject to survey and contract”, ensuring a period of uncertainty for both parties, and risks for the rest of the chain. Changing the system would produce a more level playing field, with seller and buyer having the same information when the key transactions decisions and offers are made. This is a general principle behind most consumer protection law, and should particularly apply to what is most consumers’ largest transaction by far.

Member

Ian C, Whilst I agree, and my own experience is similar, I disagree that the “current system is stacked in favour of the seller”.

In my latest house move, conveyancing dragged on for four months. When completion day finally arrived (the purchaser chose the date, I agreed it), 90% of the contents of my home had been loaded onto a van when my solicitor rang to say “The purchasers haven’t got the money”. That cost me £600 in failed removals costs, many hundreds of pounds in knock-on costs and massive inconvenience. The system most certainly didn’t feel stacked in my favour (nor the favour of the seller of the house I was buying!)

My advice now to house buyers/sellers – always INSIST on exchange several days before completion no matter how much everyone else might object or say it isn’t necessary, and call the entire transaction off if they won’t agree.

I think we need to be cautious of allowing the seller to commission the survey and other paperwork. We’d need legally enforceable standards and regulations in place to ensure surveys were carried out properly. By implication, that would mean surveyors becoming financially liable for any errors or shortcomings in their reports. Fat chance!

And I do think it’s touching that you seem to think there is hope that our current government might tackle this.

Member

From a logistical point of view there is a need for about a fortnight between exchange of contracts and completion [unless the seller’s property is already vacant]. With the simplification of conveyancing and money transfers over recent years it is possible to exchange contracts and complete the transfer almost simultaneously but practical factors like packing and removal and transfer of utilities means it is sensible not to rush this stage. It is the earlier part of the buying and selling process that needs to get a move on, especially to cut down the stress levels. Of course, the more links in the chain the more difficult it all is.

Conveyancers nowadays do all routine correspondence by e-mail so waiting for the post to arrive is less of an issue, but important original documents that have to be studied and filled in or signed in the presence of a witness still have to go back and forth by post but in my experience they are not the hold up.

Member
Maggie Willow says:
19 May 2017

I do not agree that the seller comes out of the process of selling their house better. I paid over a thousand pounds solicitors fees as 3 people pulled out of buying my cottage at the last minute.This is unfair. I agree that the law in Scotland seems a better deal than the English one.

Member
Happy says:
4 June 2016

We have been trying to buy new build home for over a year. All the developments around our area never have any houses available. We get a text message and sometimes a call from the developer that a property has become available. So we go to sales office as quickly as humanly possible but when we get there all the houses are sold.
Buying a old home is far more difficult as agents put you in competition with someone to raise the price of the house.
The only option left is to build our home from scratch but finding a plot is near impossible.
Even if you have got all the finances sorted out, buying a home is made harder by design.

Member

The rate of building new homes is still far too slow to satisfy the demand for property. Developers have a direct interest in creating a shortage – they often have all the permissions they need and sites for all the plots but they just will not get on and build them since they make more money if they have a queue. Our small new development of 64 houses took nearly three years to complete even though every house was selling straight off the shovel. This made it very unpleasant for some of the first occupiers since they were in a building site for ages.

Member

Just out of interest, where are all the people living at the moment if there is a shortage of new homes? (not a loaded question, just for information). Are they with family? Or are they in rented accommodation waiting for a home of their own?

There is not a shortage of homes everywhere. It might be worth developing parts of England (and the rest of the UK while it exists) where land is cheaper, where housing id available, by creating industries and commercial enterprises outside the “popular” (scarce and expensive) areas and reducing the need to commute at the same time. This would require long-tern planning by the Government, but they only seem to be capable of doing that for things like defence.

Member

Survival rates of newborn children are good, yet residents of the UK are lagging behind most other European countries in recognising that it might be a good idea to have one or two kids. We are – on average – living longer too. Much of our housing stock was not built with the car in mind, yet families often have two or three cars, or more to accommodate when visitors arrive.

Member

You’re right, Malcolm – the shortage of new homes, or indeed any homes, is a distribution problem. As you say there are many parts of the country where housing is cheap and land is available. House builders do not want to build new properties where prices are depressed, though, as that obviously indicates that demand is low. The key to rebalancing housing provision is to do exactly as you say and relocate work to where there is a ready supply of workers, but it doesn’t happen. I had hoped that the digital revolution would enable firms [and other organisations] to transfer a lot of their activities to other parts of the country where the schools are pouring out well-educated pupils with little prospect of work in their home area. By the nature of things, metropolitan areas attract suburbs and armies of support workers who need to live within close distance of their work and occupations so there is huge pressure on the available housing. Yet in London, and the bigger cities, more and more office space is being provided and for every single worker in such places there is a necessary tail of two or three workers in the service sector; in fact it might be more than that as commuting distances extend. The service sector can only function where the primary earners exist so relocating the body of primary earners will act like a swarm of bees following their queen and lead to a resurgence of investment in other towns and cities. Developers will see better opportunities to build new houses, shopping and other forms of commerce will regain momentum, the quality of life could be improved enormously for millions of people. There are many towns with populations in the twenties and thirty thousands now where there is not a single firm with more than a handful of office workers. The only office spaces are in blocks attached to depots and small factories or inside big supermarkets providing support services to the company to which they are physically attached. The legal and accountancy sectors seem to be able to operate in small towns but they are also consolidating rapidly.They are not firms providing a commercial [office-based] service on a regional or national scale. Consolidation in the financial services sector has been a major cause of this as they have concentrated their operations in a handful of major centres. So instead of new technology enabling outlying operations to support a small central core it has come about that central establishments have become larger exercising control over, and feeding data out to, small local outstations that are vulnerable to all the other economic pressures which are rarely felt at the centre.

It seems to me that, despite the imposition of ‘affordable homes’ requirements, government-subsidised starter homes, and help-to-buy schemes, most new houses are being occupied by people selling a previous house because they wish to have a bigger home, a smaller home, or a newer home with better features. This releases a chain of other properties into the market many of which are suitable for, and priced for, the first-home buyer. So good quality new homes with the space and facilities people need are the key to meeting overall demand. But they have to be where people can work or have other connections. That this can all be left to chance is possibly the biggest mistake we have made over the past fifty years. No planning, no future.

Member
Adam Verli says:
5 June 2016

We had a nightmare attempting to purchase our first home. Having made an offer on a flat our solicitor began the convincing process, there were dozens of emails between the parties and getting any information proved extremely difficult. The flat had been made from two offices, which we knew but when we started looking at paperwork we found there were two electric, water , gas supplies and still two addresses. When we dug further we found it was not registered as a flat, planning process has not been followed, and what was built was in fact not what was on the plans and not on the lease. When we questioned their solicitor and agent about this we were told that they were under no legal obligation to say weather the flat was legally a flat or in a building legally built. We withdrew but lost our deposit, and agent was incredibly rude and very pushy at the end and we contacted the director of the company about the issues.

Member

There are two factors that seem to be causing problems for would-be buyers. The first is the sheer amount of property investment being made in London by wealthy foreigners. That removes a fair bit of housing stock from the pool, as it were, so houses everywhere else start to rise and become scarcer.

I suspect the other issue is second homes / buy to let. It’s becoming increasingly common for people to either buy themselves a holiday home at the seaside, or move into the landlord business. I suspect there’s more than enough housing for everyone, but some of the wealthy like to have more than a single house.

Member

For those who can afford mortgage repayments I presume the main obstacle to house purchase is raising the deposit and cash for all the fees and stamp duty. Perhaps we are too obsessed with owning our own homes (well, many don’t really, mortgage lender owns it, the moreso when it is an interest-only mortgage which I have always thought a bit of a silly proposition). These same people could, like those in many other countries, rent their own home. I don’t much like the rents that private landlords charge (they have to because of the housing cost, generally making I understand around 5% return). So since it is in local authorities gift to grant planning permission, and thus vastly increase the value of a site , perhaps they could partner developers to construct flats but on the basis that the land was included at a much more sensible cost. These flats would be let at a profit to help subsidise genuine social housing schemes.

Member

Property prices in my neck of the woods are way above the national average. What few smaller houses there are available are snapped up by wealthy investors in the immediate area and beyond, renting them out at a premium, leaving little hope for younger people raised here to purchase anything affordable, so they are left with little choice other than to move away.

I sold my house nearly 3 months ago with a view to purchasing a new build to be closer to my son, but unfortunately due to the current haphazard and arbitrary state of the property market in England & Wales, I am still without a prospective home to move to due to the unethical and unprincipled practices of certain developers and estate agents.

The whole property market, in my view is in dire need of customizing and I would propose the following changes in order to establish a fairer system:

1. Estate agents to employ their own surveyors (some already do) whose commission is included in the agents fees so that if the vendor pulls out of the sale for whatever reason, the purchaser does not incur any financial loss.

2. Sellers should not put their property on the market until they have found a suitable property to move to and provide written confirmation they are in a position to proceed. “Still looking” is not acceptable.

3. All property with a firm offer accepted should be immediately removed from Rightmove or Zoopla and endorsed with ‘Sold Subject to Contract’ on the agents website and window display.

4. Developers should produce a written prospectus outlining exactly what is included in the price and clearly state their position with regard to their legal conveyencing processes, to avoid any nasty surprises before any deposit is paid, such as insisting upon using their own appointed solicitors with false promises to exchange contracts within 28 days.

5. Surveyors should work with the agent following inspection to determine the value of the property for sale and advise the agent accordingly who then conveys to the vendor the true market price of their home and the first buyer with an offer of the asking price should be deemed irrevocable and final to avoid gazumping.

6. Rogue and dishonest agents should be held to account for any misrepresentation with regard to the position of the vendor where a chain exists.

7. A cash purchasers financial circumstances should be forthcoming from their Banks as to whether they have sufficient funding to proceed, ‘yay or nay’. Cash buyers should not be expected to supply their personal bank statements to estate agents to confirm this before being given the green light to proceed with the purchase.

Most of the above, although somewhat controversial, is as a result of my ongoing experience with the present extremely flawed property market
system, and any people contemplating such a huge purchase whether it be with the prospect of being encumbered with many years of mortgage repayments or a lifetimes saving, is an enormous undertaking and
I feel the time is now right for government intervention to establish a
fairer system in an attempt to alleviate some of the skullduggery and resulting stress so prevalent is today’s property market.

Perhaps Which? could help!

Member

The difficulty with “Sellers should not put their property on the market until they have found a suitable property to move to” is they (the vast majority) are not in a position to buy until they have sold, or effectively, sold their own property. So whilst you might find the right property to move to, you cannot guarantee being able to purchase it. And the chain still has to work.

Member

Malcolm the chain will be prolonged by people who are continually in a process of “still looking”. I have recently pulled out of two properties with sellers who are always “still looking” and have been fobbed off by estate agents into believing offers have been made and accepted further up the chain which upon investigation by my agent has proved a gross misrepresentation. I am currently looking for properties with vacant possession and with no chain which narrows the search field and choices somewhat.

Member

A report featured in my local newspaper this last w/e states gazumping could be about to be banned by the government. ” Private meetings have been held with industry representatives to discuss bringing forward the point at which house sales become legal, in line with Scotland “.

BBC News today, a leading City investor has called on house builder Persimmon to cut back an executive pay plan that could see the management share £600m over the next five years. The scheme one of the largest ever at a FTSE 100 company outside banking, the biggest beneficiary will be its CEO, who could earn more than £100m. Mike Fox, from Royal London Asset Management, said the payments were too high “in all circumstances”.

More people are listening it seems 🙂

Member

That is obscene, totally obscene. The organising of a national boycott should be a serious consideration. The composition of the Board seems to show a very small number of people.
Two of these Directors sit on all three statutory committees – Davie and Sears.

A very large asset for all building companies are the large land banks on which they own and form as asset of the company. Revaluing the land can create balance sheet value.

Feeding building developments on to the market at a slow rate ensures a restricted supply of new houses. In many countries taxing building land is an inducement for companies to build. By creating a monopolistic group of builders this concept of acquiring land and maximising profit from shortages has become embedded as the taxation of buildable land at increasing rates is AFAIR not British.

incidentally those familiar with Which?’s LTIP debacle can see how LTIP’s in the commercial sector have a poor history and very much disliked by shareholders as the granting and payment triggers can be very opaque. The granting by Persimmon of an LTIP in 2012 at a share option price of £2.70 in a depression with a then market price of £4-£8 must be seen against a current price of around £20.00 in a boom. Who could have guessed that would happen?!

corporate.persimmonhomes.com/media/225413/REMUNERATION-COMMITTEE-TERMS-OF-REFERENCE-FEB-15.pdf

Member

dieseltaylor, the potential gain could be even more in theory – £800 million was suggested.

The reward depends upon company growth and delivering dividends of £6.50 a share to shareholders. 2/3 of the reward will go to 130staff, around £3.2M each. However, apart from maintaining growth the share price will need to reach the levels predicted – and selling such a volume of shares might well affect that.

£3.2 M over 5 years – £600k a year. I wonder how many would be concerned about that size of reward going to footballers, actors, pop stars, tv personalities……….?

I, personally, do not agree with the huge salaries or bonuses – and not even more “modest” salaries and bonuses that are becoming more common these days. If you want to give shares they should be as part of a salary as an incentive to build the company, or you should be able to purchase them at a modest discount – putting your own money into the business in the first place.

Shareholders in Persimmon will largely be institutions in whom we individually invest directly or indirectly in particular to fund our private pension (if we have one). The shareholders supported this scheme.

Member

As I understand it the shareholders have also done very nicely as a result of a return of £1 billion in cash on the back of the company’s growth as well as a sizeable increase in the company’s share price. One of the criticisms of the share investment scheme for Persimmon executives is that it led to an excessive proportion of the company ending up in the hands of staff. I am not sure that stock market valuations are an appropriate way to calculate such a massive reward which is estimated to be worth £600 million over five years spread across 150 people [but not equally – the Chief Executive is reported to be in line for £100 million]. I share DieselTaylor’s concerns over the way in which house-builders can artificially influence their corporate value.

Member

” Shareholders in Persimmon will largely be institutions in whom we individually invest directly or indirectly in particular to fund our private pension (if we have one). The shareholders supported this scheme.”

The shareholders are the institutions who have no personal money in the situation . They have OUR money. The nature of the City is one of big salaries and common directorships etc. so I am not a fan. If you consider that Persimmon sold £3bn houses recorded £638m profit you might really think that Govt needs to break up the cartel arrangements.

Member

Like the referendum I believe individual shareholders should have their say in the companies they invest in. Whether their shares are held in nominee accounts, in pensions, trusts, whatever. It would not be easy to arrange though and it might have to be limited to those on line – that would no doubt cause ructions. A practical (pragmatic) way forward would be better than the “block vote” of the institutions.

Member

A recent victim caught up in the web of one of these large developers has made me aware of the control that is imposed upon unsuspecting buyers.

First, they publicise ‘the dream’ in the form of a designer show home (or two) to arouse your interest. It is at this stage when the control begins. You are then confronted by a mature female automaton (or two) that has been programmed to reel off her companys’ conditions of sale and you are overcome with unceasing rhetoric when attempting to obtain answers to questions that could sway your decision one way or another whether to proceed with your purchase.

Second, it is not possible to obtain ‘the prize’ if you have a house to sell and when you have found a buyer, they will decide the length of a chain and your position in relation to it before agreeing to proceed with either a lifetimes financial commitment or the proceeds of a lifetimes investment.

Third, congratulations are then showered accompanied by coffee and cake or biscuits, (preferably chocolate!) when they have decided you are a safe bet, but then come the unpleasant surprises. With deposit at the ready you are informed their T&C’s require exchange of contracts in 28 days and this is is only achievable by using their appointed solicitor (or two) to engage in both the sale of your home and the purchase of their off plan property, which probably won’t be ready for occupation for another 3 months or so.

If these one-sided T&C’s are unacceptable to you, you stand to lose ‘the dream’ because in a buoyant market they probably have another one (or two) interested people lined up in rented property ready and willing to seize your new home either out of sheer necessity or covetousness.

It’s a win win situation all round for the developers, their CEO ‘s and their shareholders………I made the decision to walk away with the coffee and biscuits untouched.

Member

Beryl, when it is a sellers’ market then it is understandable that they will want to deal with the safest bet out of potential buyers. Were I selling my house, the person who offered an acceptable price and had the ability to complete quickly and without any problems would be the buyer I would choose.

I was involved in the purchase of a property from a developer without any pressure and all went amicably and smoothly, having negotiated a worthwhile discount for a completion within 6 weeks. All straightforward.

Member

Well done Beryl. If you are intent on moving sometimes the selling of your property and a little rental can provide a both the ability to move fast and cut a deal, and the weeks of wondering if you can get a sale or whether your chain will break.

During my former jobs I have dealt with many solicitor/conveyancers and there really are some process merchants out there targeted on output not quality. It was always a joy to meet people who were on the ball.

Member

Malcolm “choosing the safest bet” was not the main reason I pulled out. Any attempted negotiation on my part proved impossible. Their salespersons (robots) were under strict instructions from their HO and were expected to abide by them. I refused point blank to entrust the sale of my house with their own appointed solicitors which my solicitor later confirmed was the correct thing for me to do, the whole point being, the 28 day contract exchange was just a ploy to fulfil an “arrangement” between the developer and their solicitor(s). Arrangements of this nature are quite common in big business, as I’m sure you must be aware, (there are a lot of itchy backs in the board rooms of large companiesI).

I later took the unprecedented step of ‘phoning their solicitor who was, as I suspected, unable to guarantee exchange of contracts in the stipulated 28 days (Evidence). I then ‘phoned their HO and spoke to the management,
expressing my concerns over their unethical business practices which, as you can guess was not very well received.

There was also an issue with a change of the original floor plans whereby the downstairs cloakroom had been moved from the hallway into the kitchen/diner area. The law apparently has been changed so that 2 doors between a toilet and eating quarters is no longer required, provided washing facilities are installed, to accommodate wheelchairs. I was not happy with this arrangement as it was never explained to me the access door was no longer off the hallway and would probably affect its resale value and potential.

It is very frustrating to have to confront sales staff who withhold vital information from you until you find yourself in a chain, with a buyer expecting to move in asap and having to tell them the bad news. Developers are fully aware this makes it more difficult for you not to proceed with the purchase and you are more likely to bow to their unreasonable demands.

Member

Beryl, we were buying a new build on a development and did use the same solicitor as the developer – a local firm that we knew of. The advantage was that they had all the background information necessary so we were not paying a solicitor to repeat all the searches and so on – already done, but they still had the usual responsibilities to us as their client. That saved time and money. We had also agreed a completion date that was convenient for us; the solicitor, as recommended by the developer, then also was under an obligation to make sure everything went smoothly for both parties, which it did. I had no complaints at all.

However I appreciate you seem to have been placed in a pressurised situation and I would have reacted in exactly the same way as yourself. As a bona fide purchaser I do not have to buy their property and thus deserve being treated with respect. Sales staff on commission will no doubt be one of the problems.

I may have been lucky!

Member

Malcolm, you certainly took a risk but happily it all went smoothly. My story was meant to highlight the one-sided approach employed by developers.

Member

Before buying our new home we had lots of experience of new developments and the tactics of the ‘sales consultants’. They vary considerably but I agree they are all highly trained and motivated to close a sale. We were treated very well while we were looking and making up our minds but as soon as we expressed positive interest in a particular property and paid a holding deposit we encountered a wall of secrecy about the development. For example they would not reveal the layout of the remainder of the development or the types and designs of houses that would also be within view of ours. This was where the local authority’s planning portal came in handy and I was able to check it all out before committing. The £1,000 holding deposit was hardly a deterrent to walking away if we did not like what we saw so we did not understand why the developers were so uninformative.

While we were confirming the decision to proceed there was absolutely no room for negotiation on price but the developers were prepared to include all sorts of extras like carpets and floor coverings throughout [worth a lot in our case as the house has a large floor area over three storeys], turving the entire garden area, additional paving, and trellis on all the fences. They also waived the fees for permission to erect sheds and a summerhouse. In fact these practical measures were more valuable than a discount because it was all done before we moved in and we didn’t have to organise it ourselves or experience any disturbance.

I think this all depends on the state of the property market at the relevant time and the strong aversion of the developers to allowing price reductions to enter the public domain via the Land Registry data during the early releases. As it happens, as a matter of curiosity I started compiling a list of sold prices compared with asking prices over the full two year course of the development both to track the upward movement of prices for what were essentially the same house types built to virtually the same cost, and also to see how the marketing was affecting sold prices. It was interesting that as the development was nearing completion significant price discounts were being given in order to shift the remaining stock a.s.a.p. and enable the marketing effort to close down and move to another development.

We also received a bottle of champagne on moving-in day.

Member

“They also waived the fees for permission to erect sheds and a summerhouse.”

I take it then it was not freehold? And how much were you to be charged for the permissions. Always useful for people to know how these things operate.

Member

It is a freehold property, Patrick, but as part of the contract the developers retained the right until it was entirely completed to control the erection of sheds and other outbuildings within the gardens, presumably in case they spoiled the appearance and ambience of the development. The fee for submitting an application and plan was £120 which, as I said, was capable of being waived in order not to stymie a sale. I understand that this is not an uncommon restriction on new developments, just as they usually prohibit the erection of any ‘for sale’ boards until they have sold of their entire development so as not to give the impression that people are selling out soon after moving in. A near neighbour had to sell their house within a short period due to an unfortunate family situation, their estate agent put a board up but it was quickly removed when the developer’s sales consultant saw it and invoked the restriction.

Our shed and summerhouse proposals were accepted without demur as I had placed them where they were virtually out of sight from other properties. They were high spec structures, too, which might have helped.

Member
Mrs P says:
23 June 2016

finally got to exchange of contracts and due to move any day now, but what ride, feel like i have been put through the wringer, had brilliant estate agents, but made the mistake of thinking that an online conveyancy firm used before would be good again, was warned off not to use them but had already started and talk about having to nag them to get their finger out, was non stop. Everyone involved with the selling and buying joined in to try and get them to get the paperwork done, but they lost some and did not admit it so lied saying being sent out each day and it had not been and delayed by a week and prior to that lost 2 weeks too with returned paper work that had to go by post they said had not arrived, but like last time there was mention of other stuff with it that obviously had arrived so what happened to the other stuff. I worried with all the money laundring proof too needed, if they loose other stuff then can they loose copies of really important stuff that would allow fraudsters to use our details! Even trying to keep the removals on standby as dare not book was more stress and it was suggested a few days back can’t you get another one. What planet so some people live on, did they think some firm would step in last minute and charge me a reasonable fee, let alone would it be the firm no one else wanted. I just feel they treated this important life changing situation as if i was buying something for under a £1 instead of thousands. It does not matter how organized you are, if you do not get the same with those you have to employ, then the stress is huge. Lesson learned try and read up about firms you may think of using to see if any bad customer views before going with them.

Member
Anne says:
24 June 2016

I know people always call Solicitors, and there are good and bad ones, but you have the backing of the Law Society if they c**k up and the best way to choose one is by word of mouth. I worked in the legal profession as a conveyancer for over 30 years and pride myself on a job well done! I liked hapoy clients. I’ve long since retired but I’m sure there are plenty like me who would have done an excellent job for you.

Member

That is a cautionary tale. Mrs P, and I am sorry to hear of your difficulties. With the on-line conveyancing services you probably have no idea who is actually doing the work for you or where – they might be operating out of their back bedroom for all you know. As Anne says, with a solicitor’s firm you do have a lot more protection and the conveyancers and para-legals who do the day-to-day work do have a supervising solicitor overseeing each case to whom you can turn if you have any concerns. In the overall scheme of things I think that is worth the small extra cost that might arise [in any case I don’t think solicitors’ charges are that high given the responsibility they take on, unlike estate agents on 1.5%].

With other service providers you would usually pay them separately for the work done, which gives you some room for manoeuvre, but you will find that the conveyancer’s charges will be taken straight out of the resultant proceeds as shown on the completion statement. Nevertheless I feel it would be worth putting your dissatisfaction on record and appealing for a reduction in fees on account of poor service – especially since you have the e-mails to prove it.

Member
Alan Petts says:
29 June 2016

In Australia purchasers make their offer to purchase and if accepted, the parties liaise via respective solicitors re contracts and with the purchaser required to lodge a deposit e.g 10% of purchase price (or at least a substantial agreed sum). Subject to meeting contract sale conditions e.g. satisfactory building survey/building inspection etc., then the purchaser is typically committed to complete in finite period e.g. 8 weeks. If not completed the deposit is passed to the vendor and is ‘lost’ to the purchaser. In practice, if both are willing, the parties may agree an additional time for completion – but that is very much up to the seller. Our experience, having sold and purchased several times while we lived there, this is a tidy and quick process because of the commitments required.

Member

Sale by auctions do occur in the UK but it is a very very much rarer system than the Australian system. One thing that bemuses people is how do you cover the point where you own a house and need to sell it before you can another. Do Australians sell – move to rental – then buy as a cash buyer. Or is there another method? Bridging loans in the UK are very uncommon which might be a method but for the slow sale possibly due to broken chains.

Overall the auction method seems to have many benefits and few drawbacks.

Member
James Kilty says:
8 May 2017

I agree the system is flawed. Estate agents make a fortune on a fixed %, the same as it was 50 years ago. I have been bounced into a reduction at the last minute and two of my children have been messed about 3 times, paying for surveys whist owners were uncontactable or decided not to sell in the end. Either the Scottish system or the Australian would be ideal. Conveyancing can be a nightmare depending on unknown solicitors, some of whom can be very slow. We must be able to agree a binding contract with a set time and known costs. Chains are dreadful.

Member
Bill Eaton says:
11 May 2017

The problem with the system in England and Wales is that people expect to sell and buy simultaneously, which creates the chain of transactions that can only move as fast as the slowest link and where the whole chain will collapse if just one party pulls out. The Scottish system does not remove this problem. In Scotland people are prepared to accept that their sale and purchase will be separate transactions, either they sell, rent temporarily then buy, or they buy with either cash or a bridging loan and then sell later. The English and Welsh system would work quite well if its users were prepared to give up the simultaneous sale and purchase. Those who say that we should have a system like Scotland are clearly under the mistaken impression that there is some magical way to avoid the problems with chains.

Member

Chains are becoming more problematic because, in a nutshell, old people aren’t dying and young people aren’t buying. Everyone on the move seems to have something to sell. I hesitate to suggest a solution for the first obstacle but there must be a solution to the second. There need to be fewer links between the open ends. Sometimes divorce comes to the rescue and provides a shorter chain. A second home can also provide a break point because it enables the first home to be sold chain-free or could itself be sold up. With the number of houses people own over a lifetime having grown from three to seven or more we need to think of more things with which to lubricate the market and the availability of economical short-term staging-posts – and the logistics to go with it – could be one answer.