Azara Blog: Tories want to speed up buying and selling of houses

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Date published: 2007/12/07

The BBC says:

The Tories have launched a review aimed at speeding up the way homes are bought and sold in England and Wales.

The party has recruited property expert Kirstie Allsopp to help come up with ideas to make the process less expensive and stressful.

Shadow Housing Minister Grant Shapps says the party would start by ditching the new Home Information Packs (HIPs).

The government attacked the Conservative proposals as a "bad deal for first time buyers".

But Mr Shapps said HIPs had "introduced wasteful red tape and up-front costs to the seller with little or no appreciable advantage to the buyer".

He said the Tories would keep the government's Energy Performance Certificates (EPCs) but wanted to "improve the process of moving home".
...
The Conservatives have also signed up property expert Owen Inskip to focus on the housing industry, seeking the views of estate agents, surveyors, solicitors and mortgage lenders.

The making and accepting of an offer on a house could be made legally binding to end gazumping, in one of the proposals being considered.
...
Housing Minister Iain Wright said: "First time buyers would have to pay for the information they now get for free, and would be bound in to an offer even when they haven't been given the facts about problems with the property.

"The Tories have no explanation about how they would provide Energy Performance Certificates which help cut carbon emissions and save families money."

Well for once the Tories are speaking slightly less nonsense than the Labour Party. Wright has not a clue. No sane buyer would accept any information in the HIP, which means a large part of the information in it will need to be replicated by the buyer's solicitor. The Tories seem to recognise this, although they don't seem to accept that the EPC is also largely a waste of money.

Wright's comments on the EPC are really bizarre. It is trivially obvious how the Tories "would provide Energy Performance Certificates". It's the same way they are provided now. For example, in October 2008, landlords are going to have to provide EPCs for their tenants, and needless to say, they are going to do this without having to produce a HIP. So EPCs can be produced whether or not a HIP is produced. And Wright's claim that EPCs "cut carbon emissions" is just a fantasy of the ruling elite, without any evidence to support it.

But the Tories are not in the clear either. It is an extremely bad idea that "making and accepting of an offer on a house could be made legally binding to end gazumping". One can imagine that estate agents and surveyors would be dead keen on this idea, because it would make the jobs of the former much easier and it would produce far, far more work for the latter because it would force countless buyers to do surveys just in order to make an offer. It's not uncommon for five or more buyers to bid for a house. Imagine if they all had to get surveys (again, nobody sane is going to believe a survey by the seller).

And gazumping only happens because it takes so ridiculously long to complete on the purchase of a house, and because house prices were rising so fast that the value of the house just before exchange was significantly more than the value when the offer was made. Any government that can sort either of those problems out will have made gazumping go away. And that is a far better way to deal with this issue than to force a huge number of surveys to be made.

House price inflation is fairly easy to sort out. It's called supply and demand. Build more houses. The lengthy process of buying a house is not so easy to sort out. One of the problem is solicitors. There are of course two solicitors involved in the transaction, and surprise, surprise, they always blame delay after delay on the other side. And the number one aim of the solicitor is to cover their backside so they can't be sued, so they go crazy on silly aspects. (For example: some neighbouring property has a convenant dating back a long time saying that the light in some window cannot be blocked, but the window is far from being obstructed and that is obviously something that would not be allowed in any case by the planning office, but a solicitor could spend hours fretting about that because it means they have allegedly done a good job. Well, and it pads the expenses as well.)

The other problem is that many house purchases involve a long chain. Buying a house is not like buying a car where you can do without one for a few weeks. So this long chain needs to be all coordinated, which means that even more solicitors are involved. The fact that some chains break is not that surprising.

So the Tories can talk the talk, but the probability that they can or will do anything useful is not high.

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