Briefing

Is the home buying process working for consumers? December 2017

About Which? Which? is the largest consumer organisation in the UK with more than 1.7 million members and supporters. We operate as an independent, a-political, social enterprise working for all consumers and funded solely by our commercial ventures. We receive no government money, public donations, or other fundraising income. Which?’s mission is to make individuals as powerful as the organisations they have to deal with in their daily lives, by empowering them to make informed decisions and by campaigning to make people’s lives fairer, simpler and safer. Which? has an active presence offering solutions to consumers in the housing market, specifically through our mortgage advice, conveyancing and estate agent comparison service. Some of the observations made in this report reflect this direct experience.

Executive summary

Which? has identified housing as one of six significant themes that will shape consumers’ lives over the next 15 years.1 In addition, more than a quarter (27%) of people identified home buying process as one of the top four priority issues they want this Government to address (increasing to half for 18 to 24-year olds).2 This brief summarises the problems that we have found so far in relation to the home buying process and makes some specific recommendations for improvement. We will continue examining this sector through our policy work.

Buying a home is likely to be the most significant purchase many people will make and more than a million properties a year are bought in England and Wales. 3 However, research indicates that many people find the experience stressful, time-consuming and uncertain. There are failings at every stage of the process. Estate agents remain consumers’ main route to finding a property, but there is still evidence of poor practices. The current conveyancing process is out-dated, slow and unpredictable. And when things go wrong, consumers can struggle to access effective redress.

You Gov, consumer research has found it can sometimes take as long as nine months or more to complete a purchase, with an average timescale of four to five months.4 This is for a variety of reasons, including the complexity of the transaction, co-ordination of both buying

1 Which? and Forum for the Future, The changing consumer world, October 2017. 2 Which? A Consumer agenda for government, making markets work for consumers, April 2017. National representative online poll of 2,130 consumers. 3 HM Revenues and Customs, UK Property Transaction Statistics, November 2017. 4 You Gov, Conveyancing, 2015.

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and selling, and delays in communication. Three in ten sales fall through, which can be costly, with consumers on average losing £2,200 due to costs they have already incurred.5

This important process for consumers therefore needs a fundamental overhaul to ensure it will work much better for consumers. The success of previous attempts at reform have been limited, but improving the home buying process and ensuring better outcomes for consumers, through reduced complexity, greater reliability and more certainty, must be a priority. Our recommendations focus on four aspects: Improving estate agent services; Reforming the conveyancing process; Ensuring effective redress when things go wrong; and

Enabling consumers to make informed choices about the professionals involved.

Main findings and recommendations Improving Estate Agent Services Despite some change within the estate agency market in recent years, with the emergence of new business models, most people still rely on traditional estate agents to help them buy the property that they want. Online property portals such as Rightmove and Zoopla are now an important way for consumers to find properties; our research indicates that 43% of people find a property this way.6 Online estate agents have a more recent development and have quickly accounted for around 5% of the market.7 Improvements were made to the regulation of estate agencies nine years ago, but there are still outstanding issues. All estate agents now have to be part of a redress scheme, so that consumers have a route to complain if something goes wrong. However, even with this, consumer trust in estate agents is low (30%).8 There are no professional or legal standards required, unless estate agents voluntarily sign-up to them as part of membership of a redress scheme, professional body or trade association. This leads to significant variation in standards of estate agent services offered to consumers. There is also still evidence of anti-competitive and misleading practices in some parts of the market. For example, the Competition and Markets Authority (CMA) fined four estate agents in 2017 for taking part in a price-fixing cartel, in which they agreed to set minimum commission rates.9 10 A recent Which? investigation, found evidence of questionable practices, including house prices being artificially inflated by estate agents to attract business.11

5 Which? Home moving survey 2016, an online survey in February 2016 of 2,000 members of general public who bought a house they lived in in the previous two years. 6 Which? Home moving survey 2016. 7 Financial Times, Countrywide to close 59 estate agencies as customers move online, 5 September 2016. 8 Ipsos Mori, Enough of Experts? Ipsos Mori Veracity Index, January 2016. 9 Competition and Markets Authority, Somerset estate agents admit price fixing, Press release, 2 March 2017. 10 Competition and Markets Authority, lift lid on estate agent cartel, September, Press release, 18 September 2017. 11 Which?, Inflated house prices costing sellers billions, The Supermarket Issue, March 2017.

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A positive development has been that, since 2013, estate agents and other professionals involved in property sales have been required to abide by the Consumer Protection from Unfair Trading Regulations (CPRs).12 These regulations effectively remove the concept of ‘buyer beware’ and mean that estate agents need to be upfront about any material information that could affect the buyer’s decision to go ahead with the purchase. However, experts have reported to Which? issues with awareness and compliance with the CPRs. There are also recent concerns about acceptance of referral fees by estate agents, including whether they are sufficiently transparent and working for consumers. The FCA is looking into the practice of estate agents accepting referral fees in relation to mortgages and is considering whether the commercial arrangements between lenders, brokers and other players lead to conflicts of interest or misaligned incentives to the detriment of consumers.13

The government should review the limited regulation and oversight of the estate agent market to ensure all consumers are adequately protected against poor practice. This should include a requirement for estate agents to abide by a single code of practice to drive up standards and improve outcomes for consumers. The code should be regularly updated to reflect emerging issues and complaints from consumers.

Trading Standards and CMA should assess awareness and compliance with the CPRs to promote and enforce effective compliance. Consumers should also be made more aware of their rights and the information that they should be provided with when choosing a provider of estate agent services.

The government should also review whether referral fees for conveyancing services or mortgage brokers to estate agents are transparent enough and whether these are creating any conflicts or other negative consequences for consumers. Dependent on the outcome of the review, Government should make proposals for reform.

Reforming the Conveyancing Process The conveyancing process is complex, time-consuming and can create a lot of uncertainty and stress for consumers, with too many unnecessary delays. Delays are often caused by a lack of standardised requirements, such as variations in responses to local authority searches which can take anywhere from 24 hours to more than a month.14 Poor communication is also a common frustration for consumers. Opportunities to overhaul, standardise and simplify the process need to be taken. The conveyancing process also needs to be modernised through better and smarter use of technology. There is a three in ten chance that transaction will fall through, costing consumers significant amounts of time and money.15 The lack of contractual arrangements until late in the process, in contrast to the systems that apply in many other countries (including Scotland), is a key factor in creating this uncertainty.

12 Department for Business Energy and Industrial Strategy, The Property Misdescriptions Act 1991 (Repeal) Order, Explanatory Memorandum, No 1575, 2013. 13 FCA, Mortgages market study:MS16/2, Terms of Reference, December 2016. 14 Which? analysis of Council of Search Organisations data, supplied March 2017. 15 Which? Home Moving Survey, 2016 , an online survey in February 2016 of 2,000 members of general public who bought a house they lived in in the previous two years.

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The government should make proposals for reforms, so that key stages of the process are standardised, simplified and quicker, including consistent mortgage lender information requirements, local authority search response times and improving the ease of obtaining leasehold information.

The government should also review and make proposals to resolve any barriers to using technology in the home buying process and engage effectively with industry, as our research shows that this collaboration is essential to make any new solutions a success. This should include learning from electronic conveyancing systems and processes that have been implemented successfully in other countries.

The government should consider and consult on introducing earlier contractual

commitments, again drawing on how this works in other countries with specified cooling-off periods and get-out clauses, while also assessing the potential for any unintended consequences. This has the potential to reduce the number of failed transactions, speed up the process, and reduce both stress and cost for consumers.

Effective Redress for Home-Buyers

Consumers can struggle to access redress if something goes wrong during the home buying process. The landscape is confusing and there are some gaps in provision.

There are five main redress schemes that cover the home buying process.16 There are also separate schemes for new-build properties. As well as potential confusion for consumers from multiple schemes, there can be a lack of information about how decisions are made, variation between schemes in the time taken to resolve complaints and the cost of contacting the schemes is often unclear.

Addressing problems when things go wrong with new-build properties is particularly problematic. There are weaknesses with the warranty and associated redress schemes that mean that consumers can find it very difficult to have problems rectified, despite evidence that they are common. The National House Building Council (NHBC), for example, has reported that 98% of new build home owners reported problems.17

Warranty schemes have limitations which are not necessarily apparent to consumers, particularly when problems occur two years to ten years after purchase. The associated redress schemes can also be difficult and expensive to access.

Therefore, redress is not working as well as it should for consumers. The system needs to be improved, particularly in relation to consumer complaints about estate agents and new-build properties, so home buyers have comprehensive protection and redress schemes to drive improvements in quality and standards within the industry. Which? welcomes the Government’s recent announcement that it will review and look at options to improve consumer redress across the housing sector.18

The government should ensure that these reforms make schemes more visible and easier to access for consumers (e.g. explicit reference and advertising by members). The

16 The Property Ombudsman, The Property Redress Scheme, Ombudsman Services: Property, Legal Ombudsman and Scottish Legal Complaints Commission. 17 NHBC and Home Builders Federation, New Home customer Satisfaction survey 2017. 18 https://www.gov.uk/government/news/government-looks-at-consumer-redress-across-the-housing-sector.

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Government should also ensure that they are free for consumers to use. Reforms should ensure greater transparency about how complaints are handled, time-scales and how redress awards are decided.

The Government should also ensure that the reforms make ADR schemes more transparent and that they promote improvement in their sectors through publication of decision criteria, complaints data, and anonymised outcomes of cases.

Enabling More Informed Choices

More generally, consumers (buyers and sellers) can find it difficult to make an informed choice when selecting the professionals they need to advise them during the home buying process, including conveyancers, estate agents and surveyors. There are very few comparison tools, including digital comparison tools, currently available in this sector.

Many consumers will rely on recommendations from friends or family. While this can be helpful, it does not ensure that consumers will get the best value for money for their particular requirements. Although professional qualifications can be an indicator of standards, they are not necessarily a reflection of the extent to which the service will meet people’s specific needs.

Digital comparison tools, therefore, have an important role to play in enabling consumers to better assess the quality and suitability of professional service providers. The government, regulators, redress schemes and industry should support the

development of digital comparison tools by collecting and publishing freely and openly available data (including complaints data). To make them as effective as possible, quality indicators should be developed to help consumers make useful and meaningful comparisons. This should include data for estate agents, surveyors and conveyancers.

Introduction

Buying a home will be the most significant purchase many people will make. There are more than a million properties bought in England and Wales each year, but many people find the experience stressful, time consuming and too uncertain. In 2016 there were 1.2m properties bought and sold in the UK, with 1.1m of these in England and Wales.19 The majority of housing transactions were for freehold properties, although around a quarter were leasehold.20

The process for buying a home breaks down into five main stages: Searching for a property and attending viewings. Finding a property to buy and having the offer accepted. Undertaking conveyancing and due diligence on the property.21

Exchanging contracts and legally agreeing to purchase the property.

19 HM Revenues and Customs, UK Property Transaction Statistics, November 2017. 20 Which? analysis of Land Registry data. 21 Mortgage financing is also organised at this stage if required.

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Completion of the transaction and obtaining the keys to the property.

The process becomes more complex for people who are both buying and selling at the same time. Often consumers are buying and selling due to life events (e.g. having a baby, divorce, death). The process can be emotional and with both aspects combined it can impact decision-making, particularly compared with other transactions. If mistakes are made they can be difficult and expensive to reverse. Our research focuses mainly on the buying process. There are a number of common problems that our research, as well as previous government studies, has identified:

The process is long and complicated. Nearly one in four consumers found the process complicated, with length of the process being one of the issues.22 The whole buying process in the UK, from starting the search to completion, can take up to nine months - with a minority of purchases taking longer. Which?’s 2016 national home-buyer’s survey23 found that, on average, it took consumers four to five months from starting their search to having the offer accepted. The Conveyancing process can take five months or longer, with the process going as fast as the slowest transaction. If buying a leasehold property, there can be additional issues during the conveyancing process that add further delays.

There is high level of uncertainty and a risk of the transaction failing. In England and Wales, neither buyer nor seller enters a legal agreement until late on in the process. This means that both are free to pull out – and often do. We found around three in ten transactions fail and when that happens consumers lose an average £2,20024 in fees they’ve already paid. The main reason for a seller pulling out is that they accepted another offer, while for a buyer it happens most often when the sale on their existing home falls through.

Poor communication and dissatisfaction with professional services. Consumers have concerns about poor communication and service from professionals (estate agents, conveyancers, solicitors and surveyors).25 There is limited information to help consumers compare and choose the most appropriate provider for their needs, despite this being a high-value purchase, one that most people will make infrequently and which has potentially serious consequences if it goes wrong and/or they receive poor advice.

22 Department for Business, Energy, and Industrial Strategy, Research on Buying and Selling Homes, BIS/238, October 2017. 23 Which? National home moving survey 2016, an online survey in February 2016 of 2,000 members of general public who bought a house they lived in in the previous two years. 24 Which? National Home Moving Survey 2016. 25 You Gov, Conveyancing, 2015 and Which? National House Moving survey 2015 (1,990 members of UK general public who had bought or sold a house they lived in, in the previous five years).

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1. How can estate agent services be improved for

consumers?

There some 20,000 estate agent firms in the UK.26 Estate agents help sellers find someone to buy their property at a good price and helps buyers find properties. They also have an important role in progressing the sale once an offer has been accepted. While estate agents assist both parties, their contract is with the seller. The Office of Fair Trading (OFT) looked at the estate agency market in 201027 and expressed concern that competition between estate agents was weak. It found that the housing market remains dominated by traditional estate agents with weak competition between them on price. The OFT called for innovation and alternative business models to be developed, particularly through the online services.

The market is starting to change with many buyers using online property portals and alternative business models. Our home moving survey in 2016 found that almost 43% of homebuyers first heard about the home they ended up buying on an online property portal.28 The three main property portals are Rightmove and Zoopla are estimated to have more than 90% of the market.29 However, main property portals only allow estate agents to list properties rather than private sellers 5% of sellers now using an online agent.30

While there have been some innovations in the estate agent sector through introduction of new business models, we still have concerns about some of the practices. There are opportunities to improve how the sector operates through better oversight and regulation. Regulation and Oversight of Estate Agents

Despite some tightening of legislation around estate agents, particularly in relation to a legal requirement that they should be a member of an approved redress scheme, estate agents in the UK are not required by law to be licensed or qualified, unlike in some other countries. This means that some consumers will deal with estate agents who are not qualified and potentially not competent, increasing risks to consumers.

The 1979 Estate Agency Act sets out minimum standards of behaviour across the profession, aiming to ensure that estate agents work in the best interests of their clients, and that both buyers and sellers are treated “honestly, fairly and promptly.”31 The Act provides ‘negative regulation’ powers enabling estate agents who have proven to have undertaken bad practice to be banned. The regulator’s responsibilities include:

assessing whether an individual or business is fit to carry out estate agency work, as defined by the Act;

approving and monitoring related consumer redress schemes; and

26 Includes surveyors, ONS, Interdepartmental business register, UK Business-activity, size and location, October 2017. 27 Office for Fair Trading, Buying and selling: a market study, February 2010. 28 Which? National Home Moving survey, 2015. 29 Rightmove, Interim results for half year ended, 30 June 2017, July 2017. 30 Department for Business, Energy, and Industrial Strategy, Research on Buying and Selling Homes, BIS/238, October 2017. 31 House of Commons Library, Are estate agents regulated, Briefing paper, CPB 6900, 29 January 2016.

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providing specific advice and guidance to businesses and consumers about their rights and obligations.

Powys County Council (Powys Trading Standards), is the national UK regulator for estate agents, after changes to the consumer enforcement landscape in 2011. However, it has limited resources to undertake this role. In 2016-17 it had a budget of £220,500 and a core team of just four staff to police the sector nationwide.32

The CMA and others have also found a number of problems in the sector, in particular:

The CMA fined four estate agents £370,000 in 2017 for taking part in a price-fixing cartel where they each agreed to set minimum commission rates at 1.5% for residential property sales.33

In 2015 the CMA found that an association of estate and letting agents, and three estate and letting agents in Hampshire, agreed not to advertise prices. The CMA imposed penalties on the parties totalling £735,000.34

In 2016, the CMA became aware that estate agents in some local areas had made a collective decision to join a property portal which could be breaking competition law.35It wrote to remind them that the choice of property portal should be decided independently and not agreed with competitors.

Analysts Propcision found patterns of “portal juggling”, with the aim of hiding price reductions and how long properties have been on sale for, in several locations in London in 2015 and 2016.36 Trading Standards has confirmed that this practice is illegal.37

A Which? investigation published in early 2017, found some estate agents are over-valuing

property to win business. As a result, the property takes longer to sell and sells at a lower price than equivalent properties.38

The Government recently announced plans that all letting and property management agents should be registered to satisfy minimum training requirements, abide by an industry code of conduct and demonstrate compliance with existing legal requirements. Given the issues mentioned above, we believe that estate agents should be subject to similar arrangements. This could include a code of conduct to ensure that all consumers receive the same minimum service and quality and to drive up standards in the profession. One of the benefits of a code of practice is that it is flexible and able to be easily updated to take account of changing practices and new issues arising. The Estate Agency Act 1979 does give the government the power to set out minimum standards of competence, but this has never been enacted.

There are two codes of conduct that currently exist in the sector, RICS and The Property Ombudsman (TPO) code of practice. RICS members must comply with its UK Residential Property Standards Blue Book, as well as abiding by the RICS code of conduct. The standards 32 National Trading Standards, National Trading Standards Estate Agency Team, Business Plan 2017-18. 33 Competition and Markets Authority, Somerset estate agents admit price fixing, Press release, 2 March 2017. 34 Competition and Markets Authority, CMA complete probe into advertising of estate agents fees, press release 8 May 2015. 35 Competition and Markets Authority, open letter to estate agents on choosing online property portals, 21 April 2016. 36 http://propcision.com/blog/repeatlistings.php; FT, Estate agents accused of ‘portal juggling’ on websites, 22 April 2016. 37 National Trading Standards, Estate agents warned over ‘portal juggling, 11 August 2016. 38 Which? inflated house prices costing sellers billions, March 2017.

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were updated in September 2017.39 The Property Ombudsman (TPO) has developed a code of practice and NAEA Propertymark members, are required to comply with this. Other members of the TPO redress scheme can voluntary sign up to the code and more than 95% of TPO scheme members have done so.40 The code was updated and came into effect on 1 October 2016.

Both codes cover the relevant legal requirements. The RICS code of practice is wider and also highlights relevant case law, a set of 12 principles and guidance on what aspects need to be considered for firm management. The TPO code is regularly updated to include emerging market practices. For example, it was amended to make it clear that portal juggling is not acceptable.41 Those codes could be used as a starting point to develop a comprehensive single code for the whole industry.

Compliance with Consumer Protection Regulations

Since 2013, consumers have had additional protection when buying a home due to the Consumer Protection from Unfair Trading Regulations (CPRs) coming into effect for estate agents and other property sales businesses.42 There are now stricter requirements aimed at preventing false or misleading information being provided to consumers, ensuring material information is provided to consumers and stopping undue pressure on consumers.

The CPRs effectively remove the concept of ‘buyer beware’ and mean that estate agents (as well as sellers and their legal advisers), need to be upfront about any material information that could affect the decision to purchase.

These requirements can put buyers in a better position to make informed decisions and can potentially reduce some of the due-diligence aspects of the conveyancing process. However, these benefits will only occur if all estate agents understand and follow the new rules and they are effectively enforced.

We have concerns about whether the CPRs are being effectively implemented. Industry experts have reported to us there are issues with awareness and compliance with the CPRs. Although action has been taken where consumers have complained to estate agent redress schemes (including the TPO), Powys Trading standards has not publicly reported any actions it has taken against estate agents who have failed to comply.

Referrals to Other Professionals

The OFT previously found (in 2010) that of those who used an estate agent, 29% of sellers and 20% of buyers, chose a conveyancer or surveyor through the estate agent, and one in six chose financial advice from estate agent referral.43 There was substantial anecdotal evidence of pressure from agents to accept referrals, with an estimated total contribution of 10-20% to estate agents’ income from referrals.

39 RICS, Launch of UK residential reseal state agency, 11 September 2017. 40 The Property Ombudsman Annual Report, 2016. 41 The Property Ombudsman, Code of Practice for residential estate agents, effective 1 October 2016 42 Department for Business Energy and Industrial Strategy, The Property Misdescriptions Act 1991 (Repeal) Order, Explanatory Memorandum, No 1575, 2013. 43 Office for Fair Trading, Buying and selling: a market study, February 2010.

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In 2010, the Legal Services Board (LSB) also commissioned research on the impact of referral fees. It found that the average cost of conveyancing to consumers was lower among those estate agents taking referral fees than among those not taking referral fees, with no evidence that the quality of service provided by conveyancers paying referral fees to estate agents was lower.44 In contrast, the LSB has banned referral fees in some other practice areas. In 2013, the Council for Licensed Conveyancers also found no case for banning referral fees, but did sharpen transparency requirements.45 There is, however, still a risk that solicitors are not being as transparent as they should be about the referral fees that they pay to estate agents. A survey of conveyancing firms in 2013 by the Solicitors Regulation Authority found that a third of firms believed that other firms providing conveyancing services were not clear with their clients when it came to explaining the existence of a referral arrangement.46 Concerns have been raised more recently about the relationship between estate agents and mortgage brokers. The Financial Conduct Authority (FCA), in its call for views on competition in the mortgage sector, found evidence of situations where a consumer may be under the impression that consulting a certain mortgage broker recommended by an estate agent is necessary in order to view, or submit an offer on, a property.47 The FCA mortgage study plans to explore the incentives that estate agents have to refer consumers to use their in-house broker and the impact it has.48 There is a risk of skewed incentives in other services that estate agents receive referral fees from. Recommendations

There are a number of outstanding issues in relation to the services that estate agents provide that still need to be addressed. There is evidence of unethical practices and industry awareness and compliance with CPRs is unclear.

The government should review the limited regulation and oversight of the estate agent market to ensure consumers are adequately protected. This should include a requirement for all estate agents to abide by a single code of practice to improve standards and outcomes for consumers. The code should be regularly updated to reflect emerging issues and complaints from consumers.

Trading Standards and CMA should promote and enforce effective compliance with the CPRs in order to ensure they really benefit consumers. The redress schemes open to consumers need to use compensation awards to signal the importance of complying with the CPRs. Consumers should also be made aware of the implications their rights and information that should be provided under the CPRs.

The government should review whether referral fees paid to estate agents from

conveyancers and mortgage brokers, are transparent enough for consumers and if these are creating any conflicts or other negative consequences for consumers. Dependent on the outcome of their review, they should make proposals for reform.

44 Legal Services Board, Referral fees, referral arrangements and fee sharing, September 2010. 45 Council for Licensed Conveyancers, Legal Services Board approves CLC’s approach on referral fees, 8 August 2013. 46 Solicitors Regulation Authority, Conveyancing Thematic Study, Full Report, March 2013. 47 Financial Conduct Authority, Call for Inputs on competition in the mortgage sector, Feedback Statement, FS16/3, May 2016. 48 Financial Conduct Authority, Mortgages Market Study, Terms of Reference, MS16/2, December 2016.

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2. How can the conveyancing process be reformed?

Conveyancing is a legal process to transfer the ownership of a property from one person to another. The conveyancing process in England and Wales was developed in 1925 and has not radically changed since. At the most basic level, the conveyancing process involves checking the legal paperwork and examining whether there are any other issues the buyer should be aware of before legally committing to buy the property. However, in the UK, it is not possible to complete a property transaction online and it can take five months or more to complete. The process is outdated, complex, time-consuming and creates a lot of uncertainty and stress for consumers. There have been previous unsuccessful attempts to reform the process, with the aim of improving certainty for both buyer and seller and reducing the number of transactions that fail. There are opportunities to address the uncertainty and make the process quicker both in the short and long term. The Law Society has set out good practice, in Conveyancing Protocol which splits the process into six steps (Figure 1). 49 Figure 1: Summary of the Conveyancing Process

Source: Which? analysis of Law Society’s Conveyancing Protocol

While it is possible for people to undertake conveyancing themselves, most consumers will instruct a conveyancing professional (see section 4). If the property is bought with a

49 The Law Society, Conveyancing protocol, March 2011.

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mortgage the lender will also want legal advice, and in England and Wales the buyer’s conveyancers will often represent the lender as long as they are approved by them.

The conveyancing market is fragmented, with a large number of small players and local high-street solicitor firms still carrying out the work for an overwhelming proportion of conveyancing transactions with 80% of consumers using traditional law firms. 50 Consumers can choose between using a solicitor or a licensed conveyor. Solicitors are regulated by the Solicitors Regulation Authority and licensed conveyancers are regulated by the Licensed Conveyancing Council.

Lengthy Process

In the UK it can take five months or more to complete a property purchase. In 2010, 41% of properties exchanged within one to two months of an offer being accepted but by 2015, only 26% of consumers found their property purchase was completed within this timeframe - more than 20% found it took five months or longer (Figure 2).51 The longer the process takes, more likely circumstances change and the risk of transaction falling through.

Figure 2: Time taken to buy a property once offer is accepted, 1998, 2010 and 201552

Source: You Gov, Conveyancing 2015, OFT home buying and selling market study 2010, DETR, key research on

easier home buying and selling.

Almost half of property transactions will involve a chain and each chain on average has three to four transactions within it.53 However, chains only move as fast as the slowest transaction and if a chain breaks down, it can stop all the people in the chain from completing their respective transaction.

Several elements of the conveyancing process can cause delay and could be simplified. This includes:

50 You Gov, Conveyancing, 2015. 51 You Gov, Conveyancing 2015; OFT home buying and selling: a market study, February 2010. 52 The 1998 survey is based on buyers and time until completion. 2010 survey considers time until exchange. 2015 survey considers time until completion. 53 OFT buying and selling: a Market Study, February 2010.

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The diverse range of mortgage lender requirements. Variable local authority search response times – with many local authorities not

providing information electronically (in contrast to Scotland).

Leasehold property information – both in terms of the nature of the information and time taken for management agents to respond.

Mortgage Lender Requirements Each of the 137 mortgage lenders members in the Council for Mortgage Lenders (now UK Finance) can have slightly different requirements, creating unnecessary complexity. Each lender sets their own lending requirements and the UK Finance Mortgage Lenders’ Handbook or the Building Society Handbook lists all the individual requirements for their members. The different lender requirements make the job of the conveyancer more difficult and can increase the risk of error. It also makes it more difficult for consumers, as they might be unclear as to whether the property fits the lending criteria when they are applying for a mortgage. We found, for example, undue complexity in leasehold requirements set out by the individual lenders in the UK Finance Mortgage Lenders’ Handbook. While banks essentially count the start dates of the mortgage in three ways, the handbook shows 12 slightly different ways, adding to complexity and confusion.54

Local Authority Searches Local searches enable prospective purchasers to check planning permissions, notices that may apply and other issues, such as whether the building is listed or in a conservation area. However, local authority searches can take more than six weeks, with some taking longer than others.

Our analysis, using data from the Council of Property Search Organisations provided by TM group, found that the majority of local authority searches take between four and fourteen days (Figure 3). The best performing local authorities can return searches within a couple of days, while the worst performing take more than a month. Some of the differences depend on whether the information is online or stored on paper. 55

54 Which? Analysis of the UK Finance Mortgage Lenders’ Handbook (CML Handbook), undertaken in 2016. 55 Which? analysis of Council of Search Organisations data provided by TM group for 12 month period November 2016 to November 2017.

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Figure 3: Time taken to return searches November 2016 to November 2017

Source: Council of Property Search Organisations data provided by TM group

The Land Registry has been granted powers to create a single digital register for local land charges56, which will help make some of the information necessary as part of the process quicker and easier to access. The Land Registry is working with local authorities to deliver this.57 The government is considering how to give both local authorities and consumers free access to the register.

Leasehold Information Leasehold properties are an important part of the housing stock. It is estimated that there are 4m private sector leasehold homes in England (1.3m houses and 2.8m flats).58 However, the process of buying a leasehold property is more complex, and takes on average four weeks longer than buying a freehold property. Difficulties include obtaining the necessary paperwork from lease administrators and the lack of transparency of costs.

The Conveyancing Association59 found it can be difficult to obtain the necessary paperwork from lease administrators for two reasons: difficulties in identifying the most appropriate person to send the request to, and delays in returning the paperwork (around 37% of information is returned after more than 30 days). The fees charged to obtain the necessary information from the lease administrator can be expensive and the Conveyancing Association considers they can be unreasonable.60

The CMA’s 2014 report, ‘Residential property management services,’61 found there can also be a lack of transparency when it comes to fees. The CMA made a number of recommendations in relation to buying and selling leasehold property, including that property managers for each property should fully disclose all administration and supplementary charges for services. The CMA has worked with trade associations, and, for example, the RICS Service Charge

56 Local Land Charges provide provides information about planning permissions and protected buildings. 57 The Land Registry, Annual report and accounts 2015 to 2016. 58 Department of Communities and Local Government, Estimating the number of leasehold dwellings in England, 2015-16. 59 The Conveyancing Association, Modernising the home moving process, November 2016. 60 The Conveyancing Association, Modernising the Home Moving Process, November 2016. 61 Competition and Markets Authority, Residential management services, a market study, December 2014.

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Residential Management Code now states that information should be provided within a reasonable timescale, and that a fee can be charged for providing the information which should reflect the work carried out. However, it is too early to know if these changes have had an impact.

Due to gaps in leasehold regulation there is limited opportunity for owners to challenge fees in relation to selling their leasehold property. The First Tier Property Tribunal handles disputes over property and land, including those related to leaseholds, but has no jurisdiction over many of the costs in relation to buying and selling of leasehold property.62

High Cost of Failed Transactions The government estimates that in the region of 400,000 transactions a year could fall through.63 Our home-buyer’s survey in 2016 found that 28% of homebuyers had experienced a property transaction falling through. The most common reasons were:

The seller pulled out: they decided not to sell their home after all - 27%. The seller pulled out: someone else made a higher offer (gazumped)-21%. Their own property sale had fallen through - 21%. They found somewhere else to buy - 21%.64

We found that homebuyers on average lost £2,200. Almost half (48%) lost money as a result of a transaction falling through with 28% of those losing £1,000 or less. A minority (16%) of consumers did not lose any money search by the government also found that buyers and sellers can lose money when a transaction falls through, with 56% of buyers incurring costs and 44% of sellers. On average consumers lost between £695 and £744 depending on whether they were buying or selling. In addition out of those that incurred costs 24% of buyers and 25% of sellers lost over £1,000.65 For buyers who had incurred costs, the majority had to pay for a survey or valuation and over a half had paid for a mortgage arrangement fee. While the most common expense for the seller was solicitor fees.66 When buyers lose money, they may need to stop searching altogether and save up the money they have lost. Between September 2016 and September 2017 the average house price rose by £11,550,67 so buyers may find they need to save more to buy an equivalent property or change their search criteria.

Uncertain Process

In England and Wales, neither buyer nor seller is certain the transaction is going to proceed until fairly late in the process (at exchange) and, if a sale falls through, it can cause both the

buyer and seller to lose money and result in the need to start the process again.

62 The Conveyancing Association, Modernising the Home Moving Process, November 2016. 63 Department for Business, Energy and Industrial Strategy, Research on Buying and Selling Homes, BIS 293, October 2017. 64 Which? Home moving survey, 2016, an online survey in February 2016 of 2,000 members of general public who bought a house they lived in in the previous two years. 65 Department for Business, Energy and Industrial Strategy, Research on Buying and Selling Homes, BIS 293, October 2017. 66 Department for Business, Energy and Industrial Strategy, Research on Buying and Selling Homes, BIS 293, October 2017. 67 ONS, House Price Index UK: November 2017.

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Both buyer and seller have continued to have concerns whether the sale will proceed after the offer has been accepted. The BEIS research on buying and selling homes found that 70% of buyers and 66% of sellers had concerns. The buyers’ two main concerns were that they would discover something unexpected about the condition of the property and the seller would change their mind and not sell. In addition, if the property was in a chain they were concerned whether the seller would take a long time to find a home to buy. Meanwhile, the sellers’ main concern was that the buyer would change their mind and withdraw the offer and sellers in a chain are also concerned about other transactions in the chain falling through.68 One way to add more certainty into the process would be to have earlier contractual obligations. This would be a major change to the home buying process in England and Wales, where consumers have a lot of flexibility but less certainty. While it is possible to opt to use early-commitment contracts now, very few do. Therefore, to have any impact a mandatory approach would be needed. For any contract of this nature, there is a trade-off between how soon in the process such a contract can be signed, the number of get-out clauses needed and the requirements on sellers to provide more information upfront.

The BEIS research asked whether buyers and sellers would be willing to make a legal commitment to the other party, to exchange and complete on schedule, conditional upon having a fully independent survey and a valuation available upfront. They found that 70% of sellers were prepared to consider this option and 50% of buyers, with buyers more likely to consider this as an option if they had a transaction fail.

The main reason buyers did not want to enter a legal binding contract upfront:

Prefer to have own survey/valuation (44%). Do not trust the independence of a survey commissioned by a seller (41%).

Sellers who did not want to enter a legal commitment upfront were most concerned that if a sale fell through due to external factors, they would be left with financial penalties. 69

We consider that our proposal for further consideration (see below) would allay some of both the buyers’ and sellers’ concerns about earlier contractual agreements. Earlier contractual agreements apply in many other countries and there are some common aspects, including standardised sales contracts that are agreed quickly after an offer has been accepted, with get-out clauses and a cooling off-period.

We looked at the home buying processes in Denmark, France, the Netherlands, Norway, Scotland, Sweden and New South Wales in Australia where earlier contractual agreements apply. In all these cases, contracts are signed quickly once an offer is accepted. This is facilitated by:

Signing of a purchase agreement separate from the conveyancing process: Estate agents, or their equivalent, in Denmark, France, and Norway, draw up a sales agreement using a standardised contract which is different from the legal transfer of the property.

68 Department for Business, Energy and Industrial Strategy, Research on Buying and selling homes, BIS/283, October 2017. 69 Department for Business, Energy, and Industrial Strategy, Research on Buying and Selling Homes, BIS/283, October 2017.

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Get-out clauses: In Denmark, the Netherlands and Sweden contracts can include clauses for buyers to exit the sale, or amend the price, due to results of the condition report, or if they are unable to get necessary finance in place.

Cooling-off periods: In the Netherlands there is a three day cooling-off period once the sales contract is signed. In New South Wales, Australia, there is a five day cooling-off period, (which can also be waived by the buyer) during which the buyer can pull out of the purchase if they choose.

In addition, the responsibilities between buyer and seller are more evenly spilt. In Norway, Sweden, and the Netherlands, sellers have a responsibility to declare issues with their property, while buyers also have a duty to inspect. This helps stop transactions falling through due to undisclosed issues and encourages the buyer to commission a condition report for the property, showing that they have undertaken suitable due diligence for any future issues that might arise. We have created an indicative contractual model (Figure 4), which includes specified cooling-off periods and get-out clauses, based on experience in other countries. Further consultation and additional analysis need to be conducted to understand any potential unintended consequences, given the nature (and wider cultural aspects) of the process.

Figure 4: An Indicative Model for Earlier Contractual Agreements

Issue Detail

Offers are binding Offers are made and responded to in writing. Once the offer is

accepted it is deemed as entering into terms of a near standard,

conditional early commitment contract.

Cooling-off period for buyer Cooling off period of seven days, with no withdrawal penalty for the

buyer. This could be waived by the buyer.

Standard, time limited get-out

clauses

Get out clauses relate to:

Establishing title.

Securing finance, including failure of the buyer’s property sale if

that property was itself under early commitment contract first.

Defects not already disclosed, above a threshold.

Issues found in searches, above a materiality threshold.

Completion date agreed in the

contract

The contract should contain a commitment to making all efforts to

achieve a target completion date.

A deposit is paid once the conditions

have timed out (equivalent to

exchange).

Once get-out clauses allowed for a certain time expires, the contract

becomes unconditional and 10% deposit paid (equivalent to the

current ‘exchange’ stage).

Unless get-outs apply, any withdrawal from the early commitment

contract by either buyer or seller triggers a compensation payment.

There are Alternative Dispute

Arrangements in place

Alternative Dispute Resolution arrangements are established to

adjudicate disagreements over whether compensation is payable

under get-out clauses (with an appropriate fee).

Use of Technology in Conveyancing

Technology can help improve communication and the efficiency of the conveyancing process. While individual tasks do not take long, there is ’dead time’ as one conveyancer is waiting for

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information or a task to be completed by another party; reducing this would speed up the process. Technology can, for example, be used to help the following elements of the process:

ID checks;

Acceptance of electronic signatures; Transfer and collation of documents; and The need for more than one professional to collect the same information.

In England and Wales there has been a failure to develop and use technology effectively to improve the conveyancing process. An attempt by the Law Society to develop a system, called Veyo, failed. Other countries, such as Norway and Australia, have successfully developed online conveyancing systems through working in partnership with banks, government and industry, while Scotland is starting to develop a digital platform (Figure 5). The Law Commission has just completed a consultation which considers how to improve the Land Registration Act, including e-conveyancing.70

Figure 5: Technological Innovations to Make the Conveyancing Process Faster in Other Countries

Recommendations

The conveyancing process needs to be overhauled to make it fit for purpose and consumers’ current needs. Government should make proposals for reforms, to make the process more efficient. In

particular: o Mortgage lenders should improve standardisation of information requirements. o Local authority search response times should be reduced, building on best practice. o Obtaining leasehold information should be easier and quicker, building on the CMA’s

work.

70 Law Commission, Updating the Land Registration Act 2002, A consultation paper No 227, March 2016.

Norway

A property transaction in Norway takes on average two days. Since 2011, no “wet” signatures are needed.

The public can also access important information related to the home buying process. The system, Ambita,

also links into the Norwegian Mapping Authority. A government company, Infoland, sells land information

packages. The portal allows both estate agents, banks and the public to access packages of information and

services from a single point.

Australia

In Australia in 2016 it became possible to undertake settlement (completion) electronically using a system

called PEXA. The system was developed jointly by the Land Registry and some of the banks.

Scotland

In Scotland, the Law Society has worked in partnership with the Edinburgh Solicitors Property Centre and

BDP Estate Agency Software to develop Altis, an online conveyancing system. It focuses on providing one

central place for all conveyancing transactions, providing a secure and transparent environment for both

solicitors and clients.

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The government should consider and consult on introducing earlier contractual commitments, drawing on how this works in other countries. This has potential to reduce the number of failed transactions and provide more certainty for consumers.

The government should review and make proposals to resolve any barriers to using

technology in the home buying process and engage effectively with industry as our research shows that this collaboration is essential to make any new solutions a success. This should include learning from electronic conveyancing systems and processes that have been implemented successfully in other countries.

3. How can redress for home buyers work better when

things go wrong?

The vast majority of home purchases go without any major issues. However, if consumers have a complaint which is unable to be resolved by their provider, alternative dispute resolution (ADR) provides consumers with a redress mechanism to resolve a complaint without going to court, most often through an ombudsman scheme. We looked at the schemes available in relation to the home buying process and found a confusing redress landscape, including accessibility issues for consumers and gaps in provision which can stop consumers from obtaining effective redress. Which? welcomes the Government’s recent announcement that it will review and look at options to improve consumer redress across the housing sector.71

Multiple Redress Schemes

The redress landscape is confusing. There are five main redress schemes that cover the home buying process in Great Britain covering statute agents and conveyancing. Three approved redress schemes for estate agents:

The Property Redress Scheme. The Property Ombudsman. Ombudsman Services: Property.

While for conveyancing, The Legal Ombudsman is the redress scheme for regulated legal firms in England and Wales and Scottish Legal Complaints Commission in Scotland.

Despite the number of redress schemes, there are some areas, such as landlords of leaseholds properties, where consumers do not have a redress scheme to turn to. We have assessed those five ADR schemes against a range of criteria including whether it was accessible, whether they publish their decision criteria and whether they publish data and other information to enable the sector to improve their complaint handling and identify and start to resolve systematic issues.

All the schemes we looked at were free and accessible. However, the majority of schemes published limited amount of data about the types of complaints they receive, their decisions

71 https://www.gov.uk/government/news/government-looks-at-consumer-redress-across-the-housing-sector.

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and the systematic issues. The Legal Ombudsman is the exception to this. In addition, none of the schemes we looked at published their decision criteria.

For some schemes it can take a long time to resolve complaints. Ombudsman Services: Property was the quickest, resolving 92%72 of complaints in less than 56 days, while the Property Redress Scheme average time to resolve a complaint was 108 days.73 In contrast, The Property Ombudsman does not publish any figures on how long it takes to resolve a complaint.

Awareness of ADR Schemes

Estate agents and conveyancers are required to signpost the presence of redress schemes at appropriate points, but some schemes require awareness-raising throughout the customer journey. For example, The Property Ombudsman requires all estate agents to display its logo in office window, and on its paperwork.74 All conveyancers are also required to provide new customers with written information about the complaint-handling process, including the existence of the Legal Ombudsman.75 If an estate agent firm or conveyancer is unable to resolve a customer complaint, they are required to inform consumers about their right to take their complaint to an ombudsman and which one they should complain to.

It is important that consumers are aware that redress schemes are available for them to use and that they can easily make a complaint when they have experienced a problem during the process of buying a property. Our consumer research found that general UK consumer awareness of ombudsman schemes is low, with (unprompted) consumer awareness of the Legal Ombudsman at 31% and The Property Ombudsman at 8%.76 As a result, it is even more important for relevant redress schemes in the home buying process to be signposted to consumers at appropriate points.

New-Build Properties

In the UK there were 138,000 new-build houses completed for sale in 2016.77 Consumers may opt for a new-build property because of a perceived lack of hassle and the ability to move straight in, with no need to do any further work. However, this is not the actual experience of new-build homeowners, with 98% of them in 2017 reporting problems.78

Most new-build properties come with a warranty, which usually covers the property for structural defects for up to 10 years. There are some 20 warranty schemes recognised by the different mortgage lenders in the UK Finance Mortgage Lenders’ Handbook.79 Some schemes are more recognised by lenders than others, with NHBC warranty scheme the most widely recognised.80

72 Ombudsman Services: Property Annual report 2016. 73 Property Redress Scheme, Annual report 2016. 74 The Property Ombudsman, General Membership Obligations, accessed June 2017. 75 Legal Services Board, First Tier Complaints Handling, May 2010. 76 Which? consumer research Alternative Dispute Resolution (unpublished). 77 Department for Communities and Local Government, Table 211: permanent dwellings completed, by tenure UK. 78 Home builders Federation and NHBC, National new home customer satisfaction survey, 2017. 79 Which? Analysis of the UK Finance Mortgage Lenders’ Handbook (CML Handbook), undertaken in 2016. 80 Which? Analysis of the UK Finance Mortgage Lenders’ Handbook (CML Handbook), undertaken in 2016.

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Some warranty providers are covered by consumer codes. There are five new-build consumer codes that have been approved by the Chartered Trading Standards Institute (CTSI); some cover more than one warranty provider, while others are firm-specific: Consumer Code for Home Builders: NHBC, Premier Guarantee, Zurich and LABC. Consumer Code for New homes: Assure Q, Protek, Global Home Warranties, and

Federation of Master Builders, BLD. Firm-specific codes: Checkmate, Build-Zone, and ICW. However, not all warranty providers have an associated consumer code. If there is no consumer code associated with the warranty scheme, consumers have very limited protection during the sales process and just after moving in. If something goes wrong, they then need to rely on the Financial Ombudsman Scheme (FOS) and the courts to resolve their complaint. However, The All Party Parliamentary Group report81, ‘More Homes, Fewer Complaints’, reported that the Financial Ombudsman Scheme is not always effective in dealing with disputes in relation to new-build warranties. The number of complaints to redress schemes about warranty schemes is relatively low, but the number of complaints to the Financial Ombudsman scheme and Consumer Code for Home Builders has increased. The Financial Ombudsman received 48782 complaints relating to building warranty schemes in 2016-17, a 70% increase on the previous year. Meanwhile the Consumer Code for Home Builders received 102 cases in 2016, an increase of 55% on the year before; however, the average award has fallen from an average of £2,032 in 2015 to £987 in 2016.83 The All Party Parliamentary Group report84, ‘More homes, Fewer Complaints’, reports that warranty companies are often unwilling to act and pay out under the warranty scheme.

We assessed four of the redress schemes associated with consumer codes for new homes (Consumer Code for Home Builders, Checkmate, Build-zone and the Consumer Code for New Homes) against a number of criteria. We have identified the following issues:

They can be expensive to access: Four of the schemes charge consumers to submit a complaint to ADR of - £100 (plus VAT in three cases.) While three warranty providers do provide a free mediation service if consumers wish to access it, there is lack of information about the service and the warranty providers powers in this area.

It can be hard to find out information about ADR easily, as in most cases the information is not publicly available and consumers will need to contact the warranty provider or the builder to obtain more information about ADR.

No scheme publishes their decision criteria. We also found a lack of publicly-available information about the complaints handled, even

though there is a requirement by CTSI to publish annual reports. It is unclear whether this is due to lack of transparency by the codes or a lack of complaints submitted to report. However, Consumer Code for Home Builders does publish a range of data and anonymised case decisions.

81 APPG for Excellence in the Built Environment, More homes, fewer complaints, report from the commission of inquiry into the quality and workmanship of new housing in England, July 2016. 82 Financial Ombudsman Service, Types of problems we’ve seen 1 April 2016 to 31 March 2017, Annual Review 2016-17. 83 Consumer Code for Homebuilders, Annual report 2016. 84 APPG for Excellence in the Built Environment, More homes, fewer complaints, report from the commission of inquiry into the quality and workmanship of new housing in England, July 2016.

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There are differences in the maximum compensation available between consumer code ADR schemes:

o Three of the four codes we examined had an award limit relating to inconvenience of £1,000.

o Three of the four codes have maximum award of 25% of the contract price, up to maximum of £50,000 inclusive of VAT. And for two of them the limit includes all complaints against the home.

o The Consumer Code for Home Builders maximum award is £15,000 and the total amount payable for inconvenience is £500.85

Recommendations

Redress is not working as well as it should for consumers. The system needs to be reformed, particularly in relation to consumer complaints about estate agents and new build properties, so home buyers have comprehensive protection. Well-functioning redress schemes should help to drive improvements in quality and standards within the industry.

The government should introduce reforms to make schemes more visible and easier to access for consumers (e.g. explicit reference and advertising by members). The Government should also ensure that they are free for consumers to use. Reforms should ensure greater transparency about how complaints are handled, time-scales and how redress awards are decided.

The Government should also ensure that the reforms make ADR schemes more transparent and that they promote improvement in their sectors through publication of decision criteria, complaints data, and anonymised outcomes of cases.

4. How can consumers make more informed choices

about the industry professionals involved in the process?

Consumers (buyers and sellers) need to appoint and rely on several professionals (estate agents, conveyancers, solicitors and surveyors) during the home buying process. However, there are limited tools to help consumers identify suitable professionals for their needs and the digital comparison market is at an early stage of development. An Infrequent and Complex Choice Consumer can struggle to choose professionals for their needs in the home buying process for a number of reasons, including:

There is limited opportunity to learn from experience, as they purchase and sell homes infrequently.

It can be difficult to identify what specialist skills/knowledge your purchase requires when appointing a professional, as it might only come to light during the conveyancing process that more specialist expertise is needed.

Consumers can find it difficult to assess the quality of advice given.

85 Consumer Code of Home builders, The Consumer Code Scheme, fourth edition, September 2017.

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There can also be specific requirements by mortgage lenders to use professionals on their ‘approved professionals’ panels.

It can be difficult to compare the service that different professionals offer, as very little information currently exists to compare with other service providers.

The main ways that consumers can currently judge whether professionals are suitable for their needs are location, professional qualifications, friends and family recommendations and referrals from other professionals. However, these avenues may not enable consumers to make an informed choice.

Limited Tools Available to Identify Suitable Professionals

There are three main tools that can help consumers to identify quality professionals that meet their needs: professional qualification and regulation; accreditation, and digital comparison tools.

Professional qualifications and regulation Professional qualifications and regulation can help ensure that professionals meet and continue to meet minimum professional standards. However, this is not necessarily a reflection of quality of service or a way to help consumers choose between one professional and another.

Not all professionals in the home buying process are required to have professional qualifications and to be regulated, as already discussed. Some estate agents will be members of RICS (professional body) or NAEA Propertymark (trade association) and therefore subject to certain additional standards, however not all estate agents are.

Both conveyancers and surveyors are professionally qualified and regulated. However, professional qualifications are not a guarantee of quality. For example, the Legal Services Consumer Panel research found that one in four wills prepared by solicitors were of poor quality.86 Like conveyancing, the quality of advice might not become clear until several years later.

Accreditation Consumers can identify firms that operate good practice by using accreditation marks or quality tools, but the scope of these and extent to which they help people choose for their particular needs can be limited. This information does exist to some extent for conveyancers with the Law Society Conveyancing Quality Mark. However, awareness of these among consumers is low. The Legal Services Consumer Panel87 found in 2016 only 4% of people said they had used a quality mark to choose a legal provider compared with 19% who had used one for electrical goods.

Digital Comparisons Tools Digital comparison tools can help consumers to choose the right professionals. There are a variety of digital comparison tools available to consumers for a number of sectors. The sector

86 Legal Services Consumer Panel, Regulating Will-Writing, July 2011 87 Legal Services Consumer Panel, Legal Services Consumer Tracker 2016, survey carried out by You Gov, July 2016

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is at an early stage of development in the home buying and selling sector with some sites starting to emerge which take price and other quality aspects into account. We have developed an indicative list of quality indicators that could help consumers choose professionals in the home buying process, some of those indicators require information that is not readily available yet (Figure 6).

Figure 6: Indicative Quality Indicators to Help Consumers Choose Professionals in Home buying Process

Category Estate Agent Conveyancer Surveyors

Pre-purchase

Location Area covered Distance from property/current location

Distance from property/current location

Online/traditional Online/traditional

Cost Total cost (including VAT) and what is included

Total cost and what is included Total cost and what is included

Professional

Competency and

Accreditations

Qualifications/ Member of trade association or signed up to a consumer code

Qualifications/ Conveyancing accreditation scheme

Qualifications/ Accreditation scheme or signed up to a consumer code

Speed Speed of sale Speed to exchange. Seller: speed to send complete contract document

Speed to visit

Speed to exchange Speed to complete land registry and payment of SDLT

Speed to send report to client

Consumer feedback Seller: quality of support. Buyer: quality and level of information provided. Both: Communication about sale progress/ Overall satisfaction of buyer and seller

Usefulness and quality of guidance and advice provided/ Customer satisfaction

Usefulness of report/ Customer satisfaction

Other % above or below asking price

Other data

Complaint data Number of complaints to Ombudsman

Number of complaints to Ombudsman

Number of complaints to Ombudsman

Source: Which? analysis of consumer research by YouGov, Office for Fair Trading and Competition and Markets

Authority

Recommendations

Consumers should be able to make more informed choices about the professionals that they use, based on greater transparency about performance and quality of service. Digital comparison tools have an important role to play in providing such information and ratings to help consumers.

The government, regulators, redress schemes and industry should support the development of digital comparison tools. To make them as effective as possible, quality indicators need to be developed with more published data to support them. We have developed some indicators that industry, regulators and ombudsman may wish to consider.

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Redress schemes and regulators should support this market by collecting and publishing data, including complaint data to help consumers make useful comparisons. This should include estate agents, conveyancers, solicitors and surveyors.