MSE News: Government announces new measures to clean up the house-buying market

Many times the buyer pulls out is also because of issues with the house or the title and legal paperwork - these changes do nothing to prevent those occurring and instead just punish the buyers for daring to want things to be right, the house not to be falling apart and the legal paperwork to be properly in order.

Or to not have a management company for a flat/building which utterly fails in their job too - I pulled out of one purchase because not only were the management company not fixing the issues they had failed to produce the leasehold pack after nearly 12 weeks and were holding up the purchase - just how bad would they be to live in a building they owned...? In that situation I would have lost money because these changes painted me as the unreliable one and not the seller or the management company who needed to pull their finger out and do their job.

And the time limit on local authority searches is all well and good but won't change the time that an oversubscribed council takes to reply. Oh, it will allow government to blame them more but won't change a thing in reality unless it comes with extra budget and resources to provide staff in oversubscribed areas with an above average property movement rate.

As for professional qualifications comments already covered that - it doesn't mean anything at all if you aren't specific and enforcement of such things is a joke in highly regulated industries let alone in the fast moving housing market. Those seeking enforcement will have lost out on their sale or purchase months before by the time any enforcement is able to be done.

I actually don't think estate agents and their qualifications (or lack of) are the major problem. I'm not a fan of the shenanigans that some of them get up to, but if anything, the agent can often save the sale and be the glue that holds the whole fragile chain together.
I think the new proposals are barking up the wrong tree and just like before with the HIPS fiasco, are using sellotape to prop up a collapsing building.
It's the wrong remedy.
The entire process is needlessly slow, stressful, uncertain, Medieval and needs to go the way of the stocks and sticking heads on spikes on London Bridge.
They could start by taking a look at how just about every country, apart from England & Wales, manages to sustain a fair, workable system with far less delay, stress and more certainty for all parties involved.
By all means keep any offer subject to survey and contract as is the case now, but with stiff penalities for gazumping / gazundering and any party pulling out on a whim *just because they can* would be a starter. Of course life happens, and the penalty could be waivered in the case of illness, bereavement, etc.
These penalities would discourage timewasting buyers (eg those who make an offer then continue to view other properties in case they find something better) and flaky sellers (eg those just testing the market with no intention of moving.)
There would then be no need for buyer deposits.
If anyone needs kicking into touch and having a rocket placed under their backsides, it's the army of slow conveyancers and mortgage lenders. The process just doesn't need to take that long.
But even they could almost be tolerated if more certainty was introduced into the process and people knew that once having made/accepted an offer, the transaction would be going ahead.
It's totally wrong to have a system that forces people to live in limbo, with their lives on hold, not knowing where they stand for anything from two months to a year or more.
That's what REALLY needs to be tackled, but imo it never will be, because the system as it stands is a very lucrative cash cow for a whole army of so-called property professionals who stand to gain from each failed transaction.
EDIT
Ironically, the estate agent is about the only so-called professional in the entire process, who does not stand to gain from each failed transaction!

A "non-refundable deposit" before money has been spent is unworkable, because a truly non-refundable deposit would fix the price before the buyer has sufficient information on the condition of the property. The reason exchange comes so late in the process is because if as a buyer you exchange without knowing everything you need to about the property, then more fool you.

I strongly support the idea of the buyer being committed to the property at the agreed price at an earlier stage subject to it being as advertised. But this in turn puts more importance on the property information report (in effect making "don't know" an unacceptable answer), and would require a relatively detailed and costly contract being drawn up specifying what rights the buyer has in the event of the property not meeting the expected standard (for instance boiler needs replacing, damp not disclosed, etc etc). Rectification paid for by seller? Right to withdraw penalty free? Right to be reimbursed their survey costs? Right to a price drop?

And in my opinion - as a homeowner - if we're going down the route of committing to the transaction earlier, the seller should be required to either take out withdrawal insurance (or if they prefer, put up cash of their own) so that the buyer can be compensated in the event that the seller wishes to take the house off the market.

Maybe there should be some sort of mandatory insurance that both parties have to take out, so that if the other party pulls out before exchange, you recover the costs you have laid out. This could also be claimed by the buyer if it is found that for example a purchase falls through due to mortgages not being issued should the cause of the declined mortgage be due to the survey results or legal paperwork not being correct. Claims would not be payable if, for example, the sale fell through because the buyer simply got cold feet, or some other similar reason.

This would encourage sales through to completion as well as allow people room to back out of a purchase with confidence if there are significant issues, rather than being penalised.

I would suspect that the costs of payouts on this sort of insurance would be covered by the number of people taking the insurance out and not needing to claim as they have proceeded through to a successful completion.

wantonnoodle wrote: »

I would suspect that the costs of payouts on this sort of insurance would be covered by the number of people taking the insurance out and not needing to claim as they have proceeded through to a successful completion.

Hmm, that sounds more like those whose paperwork is in order and who have no problem with their funding subsidising those who enter into their property transactions with a more cavalier attitude - and I suspect the expenses of running the insurance system would outweigh any benefits. Why not just rely on the parties being contractually obliged to compensate the other if they breach the contract? That's what we do in Scotland. No complicating things with deposits and so on.