You cannot be serious! Five months to buy a house?
The above sentiment is quite common from people who have bought and sold a house outside the UK. The UK government is set to reform the current process and has sought feedback on the proposals it published at the end of last year.
Kevin Horlock, CEO of the Legal Software Suppliers Association (LSSA), summarises some of the issues which will face all our members if the proposals are given the green light.
The current process is long, complicated and frustrating: it takes an average of 150 days – yes, that’s over five months – to complete – and around one third of transactions fail. The system in other countries can be better: in Norway, for example, transactions complete in four weeks or less, with digitalisation driving estimated savings of up to £1 billion over 10 years. Even within the UK, Scotland has fewer transactions which fall through as a result of more binding contracts and the provision of upfront information (UFI).
The government proposals centre on making the whole process of conveyancing digital by introducing reliable common data standards, in a trusted and secure framework, which can be shared between property professionals without the need for repeated verification. This is digitalisation in practice: it means potential changes to the business model of conveyancing, which could enable law firms to generate increased revenue streams.
The Ministry of Housing, Communities and Local Government (MHCLG) noted a recent poll of home movers showed that no more than 2% (sic) believed they had received enough information before the offer was made. Pilot trials in England suggest that obtaining searches early in the process has the potential to increase the speed of the average transaction by four weeks. Digital logbooks may be the solution: they can provide all the relevant information – digitally, of course – early in the process to prevent delays. The onus would fall on the seller of the property to work with conveyancers, estate agents and surveyors to carry out searches and an assessment of the condition of the property before the property was listed for sale.
This UFI could go beyond what the law currently deems material information in property listings. It could include key facts such as:
• Tenure
• Council tax band • EPC rating
• Type of property.
It could also include legal and transactional information such as:
• Information about the title
• Verification of the seller’s ID
• The terms of any lease and service charges • Data about the safety of the building
• Standard local authority searches, planning
consents and an assessment of flood risk • The status of any chain
• A clear and accurate floor plan.
What could this mean for conveyancing law firms? In essence, a change in business process – and firms will do well to anticipate any changes in their legal software which they might need. The aim of the proposals is to streamline the process of conveyancing by digitalisation, meaning that data would be available at source: conveyancers would then be receiving data which had been certified to show its embedded provenance. The conveyancers could therefore know they could trust it and that data would then be
Kevin Horlock is the CEO of the Legal Software Suppliers Association (LSSA).
Kevin first cut his eye teeth on software and IT in the Royal Air Force in 1988 long before the first web page appeared. Since then, he has used innumerable small and large systems and has been involved in selecting and specifying various software. As chief executive of the Legal Software Suppliers Association, he has direct experience of selecting software for law firms and of the implications of change.