Archive for the ‘Conveyancing’ Category
Tuesday, December 8th, 2009
According to the Scottish Executive and Consumer groups Home Reports were intended to revolutionise the Scottish house market for the better. Ignoring the results of its own failed trial, the Executive pushed ahead against reasoned opposition and sensible requests for delay, and made the commissioning of a Home Report compulsory on domestic property sales from 1st December 2008. The results have been spectacular.
- GSPC is the premier house selling organisation in the West. Their listings dropped by 80% in the month after the introduction of Home Reports. They have remained resolutely at about 50% of 2008 levels ever since.
- ESPC is the premier house selling organisation in the East. Their registrations dropped by 80% immediately after the introduction of Home Reports and are cumulatively down about 52% in 2009 compared with 2008.
- Solicitor Property Centres and Estate Agencies across the country have recorded similar figures.
- House sales recorded in the Land Register dropped dramatically in January 2009 by 64 % from the 2008 figure.
- House sales recorded in the Land Register to end October 2009, the last date on which figures are available, are running at 5503 per month compared with 8571 per month in 2008. That is a massive fall of about 36%. And remember 2009 sales will have been artificially inflated from “Normal” by purchases under the Lift scheme and by the stamp duty holiday.
On any logical view of the house market and these figures it is clear that Home Reports have had a significant deleterious effect. If the rules of a market change on a particular date and from that date activity levels collapse I think it fair and reasonable to conclude that the rule change has affected activity. Our own experience in Caesar and Howie on volumes is typical and the chaos caused by this legislation is reflected in our daily work.
- Our listings halved in number from precisely the date of the introduction of Home Reports and have not yet recovered.
- Multiple surveys had been unknown in our firm for years until the introduction of Home Reports – now we are aware of them happening all the time – and who pays for them is often a cause of dispute.
- House Purchase and Sale transactions are taking longer and are usually more expensive for both buyer and seller.
- Many sales clients have complained bitterly to us about the cost of Home Reports, many buyers do not trust the sellers Home Report and lenders frequently reject the Home Report and require their own survey to be done.
- Potential sales clients have simply said they would rather not sell than meet the cost of a home report in a slow market.
- Sellers and buyers alike treat Energy Performance Certificates (part of the Home Report) with open contempt and see them as worthless.
- In many Home Reports, some, and even most of the questions in the Property Questionnaire section are answered “don’t know”.
- Sellers in financial difficulty who cannot get credit are selling “off market” often well under valuation because they cannot afford the Home Report and they therefore cannot put their house on the market.
In the face of our experiences and the figures I have quoted I am at a loss to see how any objective view of Home Reports could fail to confirm that they actually hinder the house market not help it. We have had a recession since early 2008 and yet the largest falls in listings and sales have come since the introduction of Home Reports – most markedly so. Many commentators predicted aspirational sellers (in our view the majority of sellers) would leave the market if it became too expensive to sell – and they have done just that, in their thousands. Every aspirational seller is also an aspirational buyer – which is why chasing this group from the market by ratcheting up the price of entering the market was such a daft policy decision. Indeed I wrote to Alex Neil, the Housing and Communities Minister, and all MSP’s advising that Home Reports would decimate the market and cause redundancies throughout the property and mortgage sector as well as in areas where trade relies on house transactions such as furniture shops, carpet shops etc. Such closures and redundancies throughout Scotland are now well documented.
As an aside, it seems pretty remarkable to me that a policy introduced to stop the non-existent problem of multiple surveys can actually cause multiple surveys and still be declared to be a success by our Housing and Communities Minister. If this mess is a success what on earth would constitute failure?
Sadly Home Reports were conceived in a Fantasy Land peopled by politicians, consumer “champions” and surveyors, with a sprinkling of a few non-representative lawyers. In Fantasy Land the 250,000 or so Scots who bought 155,241 houses in 2007 (and similar numbers in the years before that) were all hapless victims, recklessly spending their hard earned money on houses they knew absolutely nothing about. All these unfortunates apparently quite unwittingly bought “pigs in pokes” which might ruin their lives forever. This upset the consumer organisations and politicians who always know much better than the actual buyers themselves how and in what way they should spend their money. Oh and of course, these silly buyers were racking up about 5 survey fees a purchase as well. Of course in Fantasy Land it was all just that – pure fantasy.
Without wishing to be offensive I see from a recent press release that the proponents of Home Reports remain happily resident in Fantasy Land congratulating themselves on how they have fixed the house market – which they surely have.
Home Reports have “benefited buyers and sellers over the last 12 months” – The RICS.
“Which is delighted the new system is working well” – Which.
“It’s good news for everyone” - Alex Neil Housing and Communities Minister.
Well it must be great to live in Fantasy Land, where propaganda trumps facts. For the rest us left behind, we have to live with the gritty realities of life, one of them being the worst property market in living memory, a market brought to its knees by compulsory Home Reports.
There is an easy fix to this shambles. Just remove the compulsory nature of Home Reports – get rid of the £500 civil fine for selling without one – so sellers can freely decide whether to commission a Home Report or not. Then we will soon see who is right in this debate – because members of the public will decide for themselves whether Home Reports are a good thing worth paying for or whether they are not.
Should anyone in Government, the RICS, Which, or Consumer Focus Scotland read this article I hope someone will publish their response.
To save the hard pressed the bother of having to read it – I can tell you now what it will be.
“It wisnae us – it wis the recession”. How convenient. At all costs the Home Report Project must be saved irrespective of fact, logic, job losses, or the economic damage it has done. Just wait and see.
Tags: Home Reports, housing market
Posted in Conveyancing, Estate Agency | 2 Comments »
Tuesday, December 1st, 2009
I suppose, I should not be surprised at the latest RICS attempt to suggest Home Reports are a great thing for the Scottish house market. After all, some parties have suggested surveyors are making a killing to the tune of £36 million a year out of Home Reports and Energy Performance Certificates – but it is not for me to comment on that since I do not know the figures. I think it fair, however, to point out that surveyors do not generally carry out Estate Agency or conveyancing and therefore their experience in the house market is limited to just one part of the sales process.
What I find pretty disquieting is that the RICS simply interview their own members, who clearly have a financial interest in Home Reports continuing, and then they present to the unsuspecting public their “findings” as “research”. Then the RICS public relations staff pull in some quotes from sponsors of the legislation who are only too desperate to see some good PR for this legislation whether or not it fits in with the facts.
We deserve better than that but we are not going to get it from the RICS, politicians or consumer groups.
Here is some information I have gathered from our experience at Caesar and Howie since Home Reports became compulsory on the 1st December 2008. Unlike the RICS I would not dream of claiming this to have the title of “research”. But as a collection of experiences it may be of interest to some.
- House sales in Scotland averaged 8571 per month throughout 2008 when the recession was at its height and mortgages were desperately difficult to get.
- Various government initiatives including reduced stamp duty and £61m of Lift mortgage finance were available for most of 2009, mortgages generally were easier to come by also, yet house sales slumped to a mere 5347 per month from January to September 2009 (the last date on which Land Register figures are available).
- Our own listings at Caesar and Howie halved in number from precisely the date of the introduction of Home Reports and have never recovered.
- Multiple surveys had been unknown in our firm for years until the introduction of Home Reports – now we are aware of them happening all the time – and who pays for them is often a cause of dispute.
- House Purchase and Sale transactions are taking longer and are usually more expensive for both buyer and seller because of the Home Report and related fees.
- Many sales clients have complained bitterly to us about the cost of Home Reports, many buyers do not trust them and lenders frequently reject them.
- Potential sales clients have simply said they would rather not sell than meet the cost of a home report when a sale might be difficult..
- Sellers and buyers alike treat Energy Performance Certificates with open contempt and see them as worthless.
- In many Home Reports some and even most of the questions in the Property Questionnaire are answered “don’t know”.
- Hard up sellers are selling off market at reduced prices because they can’t afford the Home Report and can’t get credit.
I could go on a lot longer but it does get a bit boring. However in the face of our experiences I am at a loss to see how any objective view of Home Reports could fail to confirm that they actually hinder the house market not help it. We have had a recession since early 2008 and yet the largest falls in listings and sales have come since the introduction of Home Reports – most markedly so. Many predicted aspirational sellers (in our view the majority of sellers) would leave the market if it became too expensive to sell – and they have done just that in their thousands.
As an aside, it seems pretty remarkable to me that a policy introduced to stop the non existent problem of multiple surveys can actually cause multiple surveys and still be declared to be a success by our Housing and Communities Minister. If this mess is a success what on earth would constitute failure?
There is an easy fix to this shambles. Just remove the compulsory nature of Home Reports – get rid of the civil fine for selling without one – so the public can freely decide whether to commission a Home Report or not. Then we will soon see who is right in this debate – because the public will decide whether Home Reports are a good thing worth paying for or whether they are not.
Posted in Conveyancing, Estate Agency | 2 Comments »
Monday, November 16th, 2009
The latest figures from The Safe Home Income Plan Group, effectively the Equity Release Trade Body, show that equity release lending is increasing.
The total amount borrowed under these planes increased by no less than 19% in the third quarter of 2009 from the year previously.
However the total borrowings figure being well up, actually disguises a slight drop of 2.5% in the actual number of plans taken out. What has put the figures up has been an increase of nearly 4% in the amount borrowed. On the other hand with some providers coming out of the market the figures do show the resilience of this sector of the mortgage market. Figures show in the last twelve months the wider mortgage market dropped by 63% whilst Equity Release only shrank by a comparatively modest 22%.
Partner Carmen MacIver, head of Caesar and Howie’s dedicated equity release team commented “the end of house price falls I think is going to give this market a further boost. The products are getting better and better known in Scotland and our enquiry levels just go up and up. I think the Scottish public did not get to grips with the benefits of Equity Release till after those in the South. But I think this has changed and with so many people enjoying a better retiral life style because of equity release I can only see Caesar and Howie’s services as equity release solicitors become more and more in demand”.
Tags: Equity Release
Posted in Conveyancing, Estate Agency | 1 Comment »
Tuesday, July 24th, 2007
The failure of brokers to offer conveyancing services when selling residential mortgages are costing their industry millions every year.
According to one industry commentator, easier2move, by not referring those taking out mortgages on to solicitors they are missing referral fees which could total as much as £61.8 million.
"Intermediaries are missing out on simple to obtain, profitable revenue opportunities," comments Karen Babington, marketing director at the firm.
"Referrals are not only a great way to earn fees, but also help advisers to offer a more efficient service."
While brokers conducted more than 1.2 million mortgage sales last year, the firm estimates that around three in five do not recommend conveyancing services to those purchasing a new home, IFAOnline reports.
The company states that brokers can not only earn fees through such referrals but can also ease the buying process for consumers, possibly prompting further business in the future.
Posted in Conveyancing | No Comments »
Wednesday, July 4th, 2007
Electronic sales conveyancing could add transparency to the house buying process, according to the Council of Mortgage Lenders (CML).
The council proposes that with the legal entitlements in place to undertake sales conveyancing via an electronic medium, more efforts should be made to exploit the benefits of such a system.
In this way, the CML claims that transparency could be added to the process of buying or selling a house in Scotland which was hoped to be achieved in England with the introduction of home information packs.
"There are a number of other ways in which the housing market can be encouraged to work more efficiently," the CML states.
"An example of this is the introduction of electronic conveyancing and we have been urging the government to do more to encourage this."
The CML recently claimed that prime minister Gordon Brown’s target of 200,000 new homes per year is less than the predicted growth in the number of households in the UK.
Posted in Conveyancing | No Comments »
Tuesday, May 15th, 2007
The single survey proposed by Communities Scotland to aid the house-buying process in the country will not remove the need for mortgage lenders to conduct their own surveys.
Such is the view of the Council of Mortgage Lenders (CML) Scotland, which has responded to a paper on the proposed reforms from Communities Scotland today.
The council states that in a number of circumstances, such as when a particular surveyor does not meet with the criteria set by a lender, the mortgage firm would still need to conduct a separate survey – a point which the CML states is ignored in the current consultation.
A separate concern raised by the body was that relationships between estate agents and surveyors should also be transparent.
Kennedy Foster, CML Scotland policy consultant, commented: "We are disappointed that our concerns have not been addressed in the Communities Scotland consultation paper.
"The introduction of the single survey is a massive change to the home buying and selling process in Scotland and we believe more work is needed to ensure the new system is a success."
Single surveys are intended to be implemented as a means of making the house buying and selling process simpler and reduce the number of transactions which fall through.
In February the Law Society of Scotland welcomed the Scottish Executive’s desire to improve the property sale process.
However, Janette Wilson of the organisation’s conveyancing committee commented that it still has "concerns about the proposed form of the single survey [which] may create new problems to replace those that it set out to solve".
Posted in Conveyancing | No Comments »
Thursday, April 26th, 2007
Homebuyers from across Scotland and the rest of the UK are putting themselves at risk of a "property nightmare" by failing to become properly informed about their purchases, an industry body has found.
New research from insurance broker AA has established that fewer than a quarter of consumers investing in property take appropriate steps to check the building’s condition and other factors before investing.
Some of the pitfalls into which buyers fall include failing to consider future costs, with only 23 per cent commissioning a comprehensive survey of a property and only 29 per cent making themselves aware of council tax costs.
Low-income buyers were found to be the group most likely to put themselves at risk, with just six per cent of those seeking properties under £100,000 commissioning conveyancing work on their home.
Additionally, only 15 per cent of homebuyers took the time to meet and evaluate their new neighbours before investing.
James Molloy, spokesperson for AA legal services, comments: "With homebuyers stretching themselves to the financial limits to afford their home, many are cutting back on the relatively low costs of basic legal and social inspections."
"New homeowners who do not carry out basic checks, face discovering too late that their dream home could actually be a financial time bomb."
Responding to its findings, the AA recommends taking as much time as possible to assess a property before purchase and seeking independent legal and assessor advice, consulting a solicitor if unsure about any aspect of the purchase.
Earlier this year, the AA reminded homeowners to address damage experienced by their property over the winter as soon as possible in order to mitigate repair costs and avoid the development of further problems.
Posted in Conveyancing | No Comments »
