UK property remains an extremely sought after asset class, but buying property can be time-consuming. Recently, the industry welcomed plans to speed up the process using technology.
According to government data, buying a home in the UK takes an average of five months, depending on whether you’re part of a chain of buyers and sellers. Giving a much wider range, Money Saving Expert notes that buying property can take anywhere between 12 weeks and eight months.
There are multiple factors that can slow down the process, from mortgage issues to problems showing up in a building survey, as well as delays that can arise due to being in a chain, if a purchase either above or below you falls through.
One major criticism of the current process is the lack of digitisation, with many documents involved still being paper-based. With many different parties involved in the transaction, including buyer, seller, estate agent, mortgage provider, solicitor/conveyancer, and surveyor, among potentially others, there is a lack of connection between each part of the process when buying property.
Fall-throughs can also happen for a range of reasons at any time during the purchase up until the contracts are signed, which can cost both parties money. Sometimes, the failure to complete happens due to the process taking too long, forcing a buyer or seller to pull out.
How could buying property get easier?
Last month, the Ministry of Housing, Communities and Local Government announced a 12-week project, supported by the Land Registry, to “identify the design and implementation of agreed rules on data for the sector, so that it can easily be shared between conveyancers, lenders and other parties involved in a transaction”.
Carried out in conjunction with the Digital Property Market Steering Group, the aim will be to create a system that will streamline the property buying process through digitisation, reforming old-fashioned practices and making property buying in the UK “fit for the 21st century”.
Digital identity services could be on the cards to reduce transaction times, ensuring a joining up between everyone involved. Under a fully digitised buying and selling process, all information would be reachable by mortgage companies, surveyors, etc, making each purchase less likely to fall through.
The Land Registry will also lead 10-month pilot schemes with a number of councils to identify the best approach to making more of their data digital.
The government department used Norway as an example of a success story through digitisation, where transactions complete in around one month.
The buying process
The process of buying property in the UK can vary depending on your circumstances, whether you are part of a chain, and what type of buyer you are, from first-time buyer to home mover or property investor. You may be buying property off-plan, for example, which will cut out some parts of the process.
In a nutshell, purchasing a property tends to involve:
- Working out how much you can borrow, and saving your deposit
- Finding your dream home, which may involve viewing several properties
- Making an offer
- Securing your mortgage offer
- Appointing a solicitor or conveyancer, who will require more information from you
- Arranging a property survey – this might be a full structural survey for an older property, a more simple homebuyer’s report, or a snagging survey for a new-build
- Sorting your buildings insurance
- Exchanging contracts, which is legally binding and the point at which you can’t pull out without losing your deposit
- Completing the transaction, when you pick up the keys
- Paying any stamp duty owed, and registering ownership with the Land Registry
While the majority of transactions complete without too many issues, delays and obstacles can arise at any stage of the process when buying property. By streamlining each step using digitisation, particularly the conveyancing process which can be the most lengthy, it is hoped that more purchases will go through to completion more quickly.
