The post-COVID-19 property sales boom has shone a very bright light on the conveyancing process in England and Wales and more issues it’s causing for many estate agents.
Since the housing market reopened, many agents have found that despite a roaring sales pipeline, conveyancers, lenders and valuers have struggled to get sales to completion.
For example, the Conveyancing Association (CA) said recently that turnaround times are a significant problem and that ‘offer to exchange’ has been taking 123 days, while Alex Beagrie, founder of ExchangeTrain, warns vendors that moving from ‘sale agreed’ any later than early December will be cutting it fine if they want a pre-31 March completion, when the stamp duty holiday ends.
Ian McKenzie, CEO of The Guild of Property Professionals, said: “The substantial transaction figures since the market reopened in May have caused delays in the conveyancing process.
“Add to that mortgage applications, surveys and local searches, all of which are taking significantly longer.”
According to research by Zoopla, some 418,000 properties are moving through sales progression at the moment, 148,000 more than in normal times.
“The biggest problem in conveyancing is the third-party involvement needed to collect the required information to complete a transaction,” said Beagrie, who has worked in both estate agency and legal services.
“If we could streamline this information into one giant database holding one person or company accountable for the transaction, we could turn three months into three weeks.”
But conveyancing firm chief David Jabarri of Muve says law firms need to step up to the mark too.
“There has been a lot of focus during Covid on the way the pandemic has speeded up the move to digital working,” he said.
“The next important challenge is to speed up the conveyancing process, particularly by looking at how the local authority searches are handled and analysing the efficiency of the lawyer review of key documents.”
But lending decisions have been identified as one of the most significant bottlenecks in the property sales process.
Miles Robinson, Head of Mortgages at online broker Trussle says while lenders used to take two or three days to review a document, this is now taking two or more weeks.
Other brokers have also said that in some cases it is taking up to six weeks to get a lending decision, ten times longer than it did before the pandemic arrived.
“This is down to several problems including that most lenders use old legacy systems that have not coped well with staff working from home,” said Robinson.
“Although they are one of the major bottlenecks at the moment, I have some sympathy with the lenders who are facing a huge increase in demand for their mortgages and a difficult operational situation.”
Robinson also says the government’s COVID-19 ‘mortgage holidays’ are an additional drain on lender resources, who are having to drag people away from underwriting to process the mortgage holiday requests.
But one bottleneck that has been unblocked are mortgage surveys which are back on track after an initial six week to two-months jam after the market reopened.
This is despite the challenges of gaining access to properties including wearing PPE equipment, going through a script with the occupants, and opening windows, which has cut the productivity levels of surveyors.
Many surveyors have adapted and have been utilising remote, Automated Valuation Model-based and drive-by valuations to catch up.
Many agents feel there is a lot of time wasted between valuers and solicitors to-ing and fro-ing on technical and legal queries and that there needs to be greater adoption of tech platforms that enable quicker and more transparent sharing of information between the two groups.
Property management software such as Alto can help oil the transaction wheels.
Features such as inbuilt document e-signing, and online communications between buyers, vendors and agents give everyone in the process a nudge to complete their actions quicker.
The Conveyancing Association is doing its bit, and recently issued a set of pledges for its members to adopt in order to make the progress of transactions ‘as quick and smooth as possible’.
These have been put together by the Home Buying & Selling Group (HBSG), which works with the whole property industry and government to make the buying process better and faster.
“This is not about introducing new steps into the process but gathering information earlier in order to save time later and give us the opportunity to resolve any issues before they hold up the sale,” the trade body said.
These number over 30 objectives that buyers, sellers, solicitors, valuers and agents should promise to complete.
The full list can be downloaded from the CA website, but key points include requiring estate agents to ask vendors to instruct a solicitor as soon as the property is listed for sale, and ensuring potential buyers have proof of funds and a mortgage decision in principle before they make an offer.
What is clear from talking to experts across the sector is that COVID-19 has exposed long-standing opportunities for improvement in processes. Expect action once the pandemic is over.
For the wider impact of coronavirus on the property market, check out the latest from our Research and Insights team