Why does it take as long to purchase a property in 2004 as it did 30 years ago? There has been no speeding up of the housebuying process. Surely we should be demanding improvement?
If industries cannot improve things then one body will act – the government. And the result is Home Information Packs. The Queen's Speech showed that the government is putting HIPs firmly back on the agenda.
The driver for this is not just transaction times but the millions that are wasted annually in legal and valuation fees. One thing you almost never read about is the millions wasted by intermediaries who service clients only to find that the arrangements come to nothing due to a property transaction falling through.
We all have experience of abortive transactions because of gazumping but the cost is not just financial. The stress induced by frustration must be huge. The angle the Consumers' Association took on welcoming the HIP announcement was the emotional one when it said: “Under the current antiquated system, buying and selling a house turns out to be extremely traumatic for too many people.”
The HIP proposal as its stands says the pack should contain a) proof of ownership, b) a local authority search, c) a home condition report and d) proof and copies of any relevant guarantees and warranties.
There are also proposals to introduce an environmental report. The government estimates that this information should take eight to 12 days to assemble. Two areas of contention are the valuation to be used by lenders and cost. There will almost certainly have to be a further independent valuation carried out by the purchaser.
The cost of HIPs is estimated at between £400 and £750 and if the property does not sell quickly enough an update will be required. However, it looks like properties with a lower selling price will be exempt.
A polarisation of attitudes toward the changes is inevitable but we should focus on two things – we are in a service industry and the customer is king.
In a service industry there is no product – a service cannot be stored and is therefore intangible. Not all transactions are so fraught that they live in the memory but for some customers their recall of purchasing a property and dealing with our industry is one of delay, disappointment, frustration and wasted money.
All parties must work together to improve the homebuying and selling process but I have not seen any concerted industry proposals to improve the situation. We should not be too surprised that the government has seized the initiative.