Glaring absence of "toxic practice" in Government homebuying overhaul announcement, property experts say

PROPERTY experts have denounced the glaring absence of the “toxic practice” of conditional selling in the government's overhaul of the homebuying market.

The government said hundreds of thousands of first-time buyers are set to save £710 on average when buying a home in the announcement published overnight.

Proposals unveiled by the government today (Monday 6 October) will speed up the long-drawn out and costly process of buying a home by four weeks, it said.

It will see sellers and estate agents required under the plans to provide buyers with vital information about a property upfront, including the condition of the home, leasehold costs, and chains of people waiting to move. 

Binding contracts could also be introduced to stop people walking away from agreements after buyers painstakingly spend months in negotiations. 

A full roadmap to fix the broken system will be set out in the new year.

But one thing that is absent from the announcement is conditional selling – a controversial practice where an estate agent pressures or forces a buyer to use their in-house services, such as a mortgage broker or solicitor, as a condition for their property offer to be considered or accepted.

Ranald Mitchell, Director at Norwich-based Charwin Mortgages, said it needs to be addressed among the reforms.

He continued: "Conditional selling absolutely needs to be in the roadmap. It’s one of the most toxic practices in the property market and erodes trust faster than almost anything else. Buyers should never be pressured into using a particular broker, solicitor or surveyor as a condition of having their offer accepted. 

"If the government is serious about rebuilding confidence and raising standards, it must make tackling conditional selling a priority, not an afterthought. Without that, the system will remain open to abuse no matter how many new qualifications or codes of practice are introduced."

Michelle Lawson, Director at Fareham-based Lawson Financial, agreed, adding: “Conditional selling can’t and shouldn’t be ignored. It is one of the big problems that should be addressed further than it all is. Too many people are affected by such poor and desperate business tactics.”

Adam Stiles, Managing Director at London-based Helix Financial Partners, said conditional selling needs to be part of the roadmap.

He added: “Accountability for the great conveyancer churn houses whose clients often fall into a black hole is really welcome as is greater accountability for estate agents when so many fall far off any acceptable mark. Conditional selling must absolutely be addressed in these reforms otherwise they risk being wide of the mark.”

Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, said it comes down to ethics.

She added: “Mandatory qualifications and codes of practice won’t on their own fix rogue traders and sharp practices. After all, the banking and financial services industries are littered with scandals and stories of highly qualified and certified providers falling short of their responsibilities to consumers. Transparency and choice is essential of course, and this is a step in the right direction, but until we address ethics, this could be another exercise in window dressing.”

Chris Barry, Director at London-based Thomas Legal, said the reform may be scuppered before it even has a chance to be signed off.

He continued: "Time kills deals, the current time it takes to purchase a property is somewhere between 120 and 140 days which is one of the longest in the world. Mandatory upfront information will help agents secure the right buyer from the beginning and go some way to helping speed up the process. 

“My concern is that unless this gets regulatory approval from estate agents, law firms and mortgage brokers, the process will remain siloed. There are around 4,500 law firms practicing conveyancing and they currently get their information in different ways from different providers. Trying to get a buyer's lawyer to accept information sellers have put together will prove troublesome unless enforced.”