UK property professionals should look to Norway when assessing how to improve the home buying process, a housing minister has claimed.
Speaking to the Council for Licensed Conveyancers’ (CLC) annual conference, Housing Minister Baroness Penn said Norway has “already demonstrated how digitalisation can foster a simpler, more transparent processes for consumers without imposing significant additional costs.”
She added: “We recognise that parts of the transformation need to be driven by government but there is a huge amount that can and is being driven forward by industry… With conveyancing at the heart of home buying and selling and conveyancers being one of the most qualified and regulated actors in the system, your profession will have a central role in realising this shared aim.
“We’ve seen an openness to change in recent years but, as with other aspects of the home buying and selling process, there’s still so much more scope for innovation to come… We need more people to become involved and we need innovations and improvements to be made at a greater pace.”
This sentiment was echoed by Mike Harlow, the deputy chief executive and director of customer and strategy at the Land Registry.
He said it takes an average of 47 days from moment a person in Norway thinks of selling to when the buyer moves in, about three weeks of which is compiling the information needed before the property can go on the market.
There are no chains, because of the speed of buying a property, and bridging finance is “easy and common” for the same reason. This different approach is “truly something to strive for”, he said.
Harlow added that the “other striking element” of the Norwegian experience was how all the stakeholders in the market –lenders, insurers, lawyers and institutions – collaborated to co-design the system.
Baroness Penn said that “placing digitalisation at the heart of our home buying and selling reforms has the potential to reduce transactions times from months to weeks and even days in some cases."
This needed to be coupled with upfront property information, and she commended the work of National Trading Standards estate and letting agency team in pushing this forward.
Harlow added: “Imagine if everybody who was a party to the transaction, or representing them, had a single shared view of what the property is, who the parties are, the terms of the deal and the progress of the deal. There would be no chasing, no doubt, no need to make three phone calls to find out where something was stuck. This is what will make the wheels spin faster.”
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After having been a real estate agent in NSW, Australia, for the last decade, the conveyancing process here in the UK is glacial. In NSW (and other states in Australia) a fully compliant, exchangable contract has to be available before a property can be marketed. Buyers usually have their finance pre-approved, and contracts exchange shortly after agreement on a 7 day cooling off period for the buyer (penalty 0.25% of contract price). Settlement is 4-6 weeks later. Bridging finance is common, as is renting between sale and purchase.
The issue in an area like Hampstead in London (and other similarly historic locations) is that some properties can be more that 300 years old, are very close together and/or overlap resulting in blurred boundaries. These issues can only be resolved detailed investigation and often is it difficult to be definitive. Where this is not the case then a speeded up integrated digitised system would of course be desirable. In particular, in respect of apartments, insisting that managing agents prepare the management pack in a detailed and timely manner would make a genuine difference to the speed of transactions.
No one is saying that the home buying and selling process in England and Wales doesn't need imaginative reform, but pointing to the Norwegian market as a model for how we do things shows how far out of touch with reality Baroness Penn really is.
And telling a group of conveyancers that this is the way to go....when the reality is that conveyancers would likely be put out of business by a Norwegian model, seems to highlight the complete lack of understanding.
The reality is that most estate agents in Norway are owned by large banks, and the estate agent, who is qualified to solicitor level, does all the work. There is, as I understand it, no separate conveyancer involved!
Add to that a very much smaller market that bears little or no comparison to that in the UK and, frankly, unless we completely start from scratch with a "blank sheet" new conveyancing process reference to "the Norwegian system" is pretty much for academic interest only.
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