September 14, 2008
The Chain Gang That Could Knock House Sales into Shape
By Laura Howard
PROPERTY Laura Howard looks at an online initiative designed to make life easier for vendors and buyersIt's clear that buying and selling property in the autumn of 2008 will be hard. Agents are currently agreeing an average of just six sales a month, according to the latest figures from the National Association of Estate Agents - down from an average of 16 this time two years ago.
But it's easy to forget that even when the property market is booming, the process of buying and selling a home seldom runs smoothly. Dealing with solicitors who keep things close to their chest, and trying to negotiate between all the relevant parties - typically during the course of a working day in the office - contribute to what is often described as one of life's most stressful experiences.
However, there may be a glimmer of hope on the horizon - an innovation that could at least help to unclog the market when housing finally pulls out of its slump.
A fledgling trade organisation called the e-Homebuying Forum (e- homebuyingforum.com) is gathering momentum. It plans to target internet-savvy property-related companies, including mortgage lenders, estate agents, solicitors, conveyancers, local search firms and providers of home information packs (HIPs). The ultimate aim of the forum is that every firm in the country involved in buying and selling a home will be featured on a single online platform. Through this, consumers will be able to track the progress of their transaction as well as communicate with all the relevant parties.
"With the introduction of HIPs [requiring vendors to assemble a great deal of information about their property], there has been a focus on using e-conveyancing to speed up the process of buying and selling," says Eddie Goldsmith, senior partner at solicitors and specialist conveyancing firm Goldsmith Williams, which is a founding member of the forum.
"As things stand today, however, this term is a generic misnomer. No firm of solicitors carries out a full e-conveyancing service, which includes electronic signatures and online transfer of land ownership. Instead it is confined to patches. While we can download local searches, we have to send them through the Royal Mail to the other solicitor, for example."
And the opportunities for consumers to harness technology are also patchy. "Most people now start looking for a home from their front room with a cup of coffee, using a property portal that empowers them via technology," says Paul Albone, commercial director at TM Property, an online search service. "But once they have found a property and instructed a solicitor, this is where the empowerment ends. Buying and selling a home is not something you do very often, so people are not well-practised; they lose control and the process can become very stressful."
But through the e-Homebuying Forum, consumers will be able to log on and monitor what stage they have reached by using information posted by each party involved in the process. For example, they will be able to see if the local search has been carried out and read the result of any survey commissioned.
"Consumers will also be able to see what is holding things up," says Mr Albone. "For instance, it might be that the solicitor is waiting on a property information form that they have forgotten to send."
But this is not the first time an idea like this has been attempted. In 2007 the Government's Land Registry launched a "chain matrix" intended to allow property professionals and homebuyers and sellers to keep track of the progress of chains on-screen. But the scheme, which aimed to encompass every transaction in England and Wales, was abandoned early this year after the pilot project brought in less than half the number of participants that had originally been envisaged.
The new forum is hoping that a more gradual approach, in which companies have time to appraise the system and update their own technology before joining, will be more effective.
Most individual sectors in the homebuying and selling process are represented in the forum, though, including banks, solicitors, HIP providers and local search firms. Names such as HBOS and LMS, the UK's largest HIP provider, are also on board. "We have a powerful panel that we hope will overcome inertia among the different parties," says Mr Albone.
Nevertheless, compared with the vast number of companies yet to join, current membership is tiny. The forum, says Karen Babington, marketing director at the HIP provider easier2move, is in for a long, uphill climb.
"We were approached by the e-Homebuying Forum but were concerned it was not run by an independent body. And in a market like this one, we also decided that the membership fee of up to 7,000 a year [for companies] was too much."
However, Ms Babington adds that if the project were to prove successful, it would be a "fantastic improvement" to the experience of homebuyers and sellers.
The online home-moving planner moveme.com is also biding its time. Its marketing director, Charles Wasdell, says that the service will only be as good as the last piece of information posted. "From offer to exchange takes about six weeks, during which time all details entered have to be up-to-date and perfectly accurate. If this is not the case, the service risks being a hindrance rather than a help to consumers," he warns. "For example, if a problem with the contract has not been shared, a consumer would not be prompted to take action.
"That said, if the information among all parties was fresh and accurate all of the time, it's an excellent idea and something moveme. com would consider being part of."
What is almost certain is that consumers will hurtle much faster towards all-encompassing technology than the e-Homebuying Forum will persuade every homebuying and selling-related company in the UK to climb on board.
In this case, membership of the forum could at least act as a stamp of approval for consumers looking for reliable e-companies. "It would be great," says Mr Albone at TM, "to think of the e- Homebuying Forum becoming a kitemark for consumers looking for joined-up online efficiency."
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