Bethany de Montjoie Rudolf CFILEx Soc Legal Services Consultant at De Montjoie Consulting Ltd brings a little clarity to the conveyancing process and why it feels like the perfect storm.
Thanks to the remnants of hurricane Gonzalo, it was an exceptionally windy day at Silverstone when I attended the Movers and Storers Show at the end of October and the mood at the ‘Moving Day Mayhem’ debate was no less stormy. The misunderstanding of each other’s position had the property industry and the removal industry at loggerheads, beautifully orchestrated by the eloquent Matt Faizey from M&G.
It was unanimously agreed, after the wise words of Property Ombudsman Chris Hamer, that the industries need to work together to find solutions for the moving day nightmares and to kick start the process I believe we first need to understand where we are at and why it feels so out of control for all parties.
It is fair to say that the upturn in the property industry took everyone unawares. It was like watching a tsunami crash though the industry, first delays were reported in the valuations with some Surveyor panels reporting that they were not booking valuations for 3-4 weeks in July last year, inevitably delaying the production of the mortgage offer.
In April, the delays were exacerbated by the effects of the Mortgage Market Review increasing the time taken to make a mortgage appointment with some, less prepared, High Street Banks reaching 3 weeks. The year on year statistics in the Mortgage Efficiency Survey conducted by IRESS quoting 20% of mortgage approvals now take over 30 days and only 44% within two weeks (down from 56% last year) this compares with 2012 when 25% of offers were produced within 5 days!
Then some of the Local Authorities got caught out by the volumes of Search applications with some reporting 10 week delays.
Next it hit the Conveyancers, who quickly found themselves with double caseloads made up of very frustrated clients in stagnating chains of fragile transactions.
The overall effect was delay as confirmed by the Residential Market Report for August 2014 from RICS reporting that the process is taking on average 4 weeks longer.
Inevitably, that wave of delayed transactions spilled over to the removal industry and those stressed out clients, who had expected to move a month before, stuck in chains of similarly frustrated home movers were now under pressure to exchange with completion … well … tomorrow.
So how has it hit us so hard, how could we be so completely unprepared? The reality is that it is not just the upturn in the market that has caused the problems but also the nature of the market and the panic created with low supply and high demand and the stagnation of the transactions creating impact on the estate agent and law firm cashflow.
With so many people chasing the transaction to try to get the pipelines flowing, the influx of chasers and update requests into Conveyancers offices increased to the point that some busy conveyancers were recording 4.5 hours on the phone every day, with a further 200 emails to respond to and that was before starting on any legal work.
The obvious solution was to recruit but with many conveyancers having left the industry the supply of experienced conveyancers simply was not there, leaving law firms struggling with excessive cases loads and placing more reliance on inexperienced staff. The perfect storm ensued and with chains pressing for the earliest possible completion date, the conveyancers and their clients were backed into a corner.
But, the intrepid industry as always has been quick to respond to the challenge, the lenders are relieving the delays in valuations by implementing automated valuation models once more, the effects of MMR are disbursing as the lenders’ systems and processes are bedding in to deal with the new regime, the conveyancing operations have set up training academies to produce carefully staged training processes to ensure that they can produce reliable and competent staff in numbers not seen for almost a decade, with initiatives such as apprenticeships being developed by our regulators and the reduction in the SRA reliance on training contracts, moving towards assessed training activities instead.
The seasonal drop in the market in August gave us all a moment to draw breath and the continued slow down, with the latest Halifax housing report showing mortgage approvals at a 14 month low, means that the communications and turnaround times will continue to improve.
In the meantime though, the advice has to be to manage expectations from the start, and deal with the reality that the conveyancing process no longer takes 6-8 weeks, but (according to RICs) more like 10-12 weeks.
If the entire chain are geared up for this from the start then, once contracts are ready to be exchanged, realistic completion dates are more likely to be agreed.
By the law firms and the estate agents keeping their clients and the rest of the chain informed of progress throughout the transaction, by making weekly outbound update calls and emails, we can keep those expectations realistic and hopefully our clients will have many more day’s notice of the date of their move, to make it a positive house moving experience … for everyone.
Read part 2 of Bethany’s market assessment in the Mover next month.
Bethany de Montjoie Rudolf
Bethany de Montjoie Rudolf, CILEx SocLC is a Legal Services Consultant with De Montjoie Consulting Ltd, helping the property industry develop systems, training and processes to improve the home moving experience, including the development of the standard Leasehold Enquiry Form and the Conveyancing Association Protocol. A previous CEO of the Society of Licensed Conveyancers and former managing director of a top twenty conveyancing law firm, Beth started out as an estate agent before qualifying as a lawyer. She is a working Mum of two boys and a confident media presenter and public speaker having appeared on a variety of BBC radio shows and spoken at industry events. Contact: 07814358627 E-mail: beth@conveyancingsystems.co.uk
Click here to view the next Editor's pick.