Timothy Douglas
As the time it takes to exchange property contracts continues to grow longer, Propertymark has produced a new report, The Dickensian Legal Process, to investigate the reasons for the increasing delays.
Propertymark's Housing Insights report revealed that while in March 2016, 78% of transactions were progressing to exchange of contracts within 12 weeks of offer acceptance, by March 2024 that figure has deteriorated significantly to just 29%.
Data collected across the UK reveals a decline in the number of exchanges taking 5-8 weeks and 9-12 weeks, whilst the number taking 13-16 weeks and 17+ weeks is increasing. The number of exchanges taking 1-4 weeks is generally low and has remained relatively stable over the past decade.
The impact of longer times to transaction is being widely felt by buyers, sellers and the many service providers who support the home buying process. While there is an urgent need to address the issue, it has been in the works for a decade and is highly complex.
Solutions will require change in the areas of people, process and systems across multiple disciplines, each with different views, resources and appetite for change. But Timothy Douglas, head of policy and campaigns at Propertymark, says the report has taken the first tentative step of acknowledging that a problem exists.
He said: “It's not new news that homebuying is becoming increasingly cumbersome and drawn out in the time it takes to complete, but with completion taking up to six months, and in some cases longer, it's more important than ever to understand the underlying issues that are causing this.”
“Our member agents are witnessing delays on the ground and have brought their concerns and opinions to the fore. Policymakers and the new Government in Westminster must address these issues to speed up the process of buying and selling a home to keep the wheels of the housing market turning, as it is a vital cog in revitalising our economy.”
The industry body said after speaking to agents across the UK, the reasons for the extension were multifaceted, interrelated and variable.
“I think it's a combination of factors… lawyers are under-resourced, they're not being paid commensurate with the work they do, so they're taking on too much work and there's no sense of urgency. I think lenders are taking too long to put out mortgage applications. Overall, the whole system is a lot slower than it's been in the last 30 years.”
However, agents identified key challenges and delays that they believe make up a large part of the problem. Firstly, agents reported that the sales process is outdated (“Dickensian”) and cumbersome to administer. Additionally, successive legislative changes are increasing the administrative burden.
“The tougher laws mean there's a lot more paperwork involved than ever before.”
This is problematic because existing systems are not designed to handle large amounts of information flow.
“The conveyancing system was designed to take into account a much smaller amount of information. Now there is a huge amount of information in the system. Information reaches solicitors' desks at various stages and it takes time to cross-reference the client's best interests, the lender's requirements and what the conveyancer considers best practice.”
Agents noted that although technologies exist that can be leveraged to streamline processes, adoption and integration of these technologies has been patchy at best.
“The system is woefully outdated, different lawyers do things differently, some are digitizing, some aren't. It needs to be streamlined and digitized.”
Agents then identified areas where there were regular delays in the provision of information needed to proceed to closing. This included information flows from buyers, sellers, surveyors and mortgage providers. However, most agents noted significant delays in the provision of local authority property surveys as the main issue.
Agents cited several reasons for lawyer delays, with some suggesting that challenges in the work environment may have made lawyers risk-averse, resulting in “delays.”
More broadly, agents report being “short on lawyers,” meaning their offices are “under-resourced.” In fact, 59 percent of agents suggest that attorney resource constraints are the primary reason for extending interaction times.
One direct impact of resource constraints was that it seemed to be taking lawyers longer to carry out activities and responses.
However, it should be noted that the perceived resource shortage is not limited to lawyers: one representative reported a “shortage of talent across stakeholders”, while another suggested:
“Lawyers are definitely under-resourced…” [However]and the organisations around it are under-resourced… surveyors, banks, local authorities, etc.”
To strike a balance, it must also be recognised that agents may also be responsible for delays, with some members emphasising that ‘agents also need to look after themselves’.One member reported that ‘some agents do not use PIQs even when instructed to do so’ or ‘do not disclose important information’.
You can read the full report here.