Overcoming the information challenge: Part 1
DigitalMove is a technology project, aiming to give home movers the best experience from start to finish.
Andy Weston is the Innovation Director & Co-founder of ULS Technology plc. Andy first conceived of DigitalMove back in 2013. It’s come a long way since then, but there’s plenty more to do!
In my previous post, I outlined a vision of being able to buy a house as quickly and easily as we buy a car, or even a TV from Amazon.
There are three main challenges facing a conveyancer, when acting for a homebuyer.
1. ensuring they are fully informed to make that important buying decision.
2. ensuring they have the funds to do so.
3. ensuring all other parties in the chain are equally ready to go.
If we are to realise this vision, we need to make each of these steps much more efficient.
Let’s consider the first one: ensuring the buyer is fully informed. I can’t commit to buying a house for a particular price until I have all the information that might affect my decision. The best experience for me as a buyer would be for that information to be available instantly at the click of a button, and in a format I can understand easily. So how practical is that?
Before answering that question, it’s probably worth just exploring the types of information we’re talking about. As a buyer there are three main areas I need to be concerned with:
1. The property.
2. Its ‘title’: the legal rules relating to the property.
3. Its environment: the surrounding area.
I want to know the condition of the property so I can budget for any work that might need doing. I also want to know about alterations that have been made, planning permissions, boundaries, disputes with neighbours, warranties, the contents I am buying, parking restrictions, connected services and any financial charges imposed by the local authority.
A property’s ‘title’ is the technical legal bit. I must be sure that the seller actually has the right to sell it for a start – otherwise I could lose a lot my money! I want to be sure the title documents aren’t ‘defective’– missing something important or containing something they shouldn’t. I also want to know about easements, such as rights of way, and covenants – the rules about what I can or can’t do with the property.
Looking beyond the boundary of the property itself, I’m going to want to know whether access roads are adopted by the council, where the sewerage & drainage goes, whether any new building is planned nearby or any big infrastructure projects such as HS2. Not to mention the risks of flooding, contaminated land, and poor ground stability.
Currently, as you can imagine, all this information takes time to collect and there is often a cost to obtaining it. One possible way to make it available instantly, is for the seller to gather and pay for it all in advance.
I believe that certainly must be part of the solution. Any information that only the seller is likely to know should be gathered, recorded, and made available digitally, so that the buyer can examine it before they make an offer. This should be done as soon as the seller puts their property on the market. At the moment it doesn’t happen until after the seller has accepted an offer and it often takes weeks before the buyer sees the information.
What about the other information, some of which is expensive to obtain by means of ‘property searches’? Should the seller pay for these in advance?
Well, this can work, but only if it’s made mandatory. Sellers are understandably reluctant to fork out for information until they know they have a firm offer on the table – at which point the buyer may as well pay for it themselves, as is the current practice. Estate agents are also reluctant to push their sellers to do this, for fear of losing that seller to another agent who’s been telling them it’s not necessary.
The upshot of all this is that it only works if the seller is compelled by law to do it. We tried this out back in 2007, in the form of Home Information Packs, or HIPs. Sellers were obliged to order a HIP before they could put their property on the market.
This bit actually worked quite well. Property searches were no longer one of the usual reasons for delays in property transactions. However, they rarely were the only reason, and so HIPs didn’t achieve their main objectives of speeding up home moving and stopping transactions falling through.
More needed to be done to speed up home moving but ultimately HIPs were unpopular. They presented a cost obstacle, preventing homeowners from speculatively marketing their properties, and so were criticised by estate agents. Ultimately, this made them an easy target for an incoming Conservative government, looking to sweep away as much bureaucratic red tape as possible to win some early political capital. HIPs were scrapped in 2010, when perhaps a better route would have been to build on what had been started, by adapting them to be more effective.
It seems unlikely we’ll be trying the HIPs experiment again anytime soon – it’s a sensitive topic within government – and it’s also unlikely that the cost of the information will come down significantly, so we need to focus on making it much quicker to obtain.
If we can make it instant, then it makes no difference whether the seller orders it in advance or not: the problem simply goes away.
To be continued…