Since the government’s Stamp Duty Tax freeze back in July, there has been a surge in property listings and sales. A Sunday Times article this week, has highlighted the need for the conveyancing industry to make improving the buying process, a key priority.
Uncertainty caused not only by this year’s pandemic but over four years of Brexit debate, has meant the property market has now gone into overdrive.
With many law firms furloughing staff in large numbers, the increase in sales has caused significant stress for most in the conveyancing world. With the majority of buyers seeking to complete before the Stamp Duty deadline in March, it is prudent for law firms to be sure they have more effective processes in place.
August saw software supplier, Law Firm Services Ltd (LFS), launch its pioneering initiative in conjunction with estate agency group Ryder & Dutton, who have 24 branches across the North of England. Announcing its ‘contract-ready’ pilot , LFS sales director Richard Mathias explained:
“After 18 months of planning and development, it is fantastic to see that we are really walking the walk not just talking about it.
“Our Minerva platform is the catalyst for a whole new conveyancing experience. The agent sends instructions to the firm when the house goes on the market, the client can immediately create a portal account, complete protocol forms and undertake facial recognition ID and AML checks, all from the comfort of their own homes.
“The process is taking less than 24 hours in the vast majority of cases.
“In addition, lawyers are then doing title checks and ordering searches. These have been secured on a “no sale no fee basis” so there is zero cost to the seller. Buyers are reimbursing the cost of searches on completion just as they do at a property auction.”
The Times article also noted that according to recent figures from property portal Rightmove, it now takes 53 days on average to get a property to SSTC which is a reduction of 9 days on last year, nevertheless data analysts TwentyCI estimate that a full transaction takes an average of 125 days from SSTC to Exchange - an increase of 18 days.
Improving transactions times for home movers will be essential when up against the March 31st Stamp Duty deadline. March promises to be an incredibly stressful period for conveyancers and estate agents alike. With a warning from the Conveyancing Association that fall out could be as high as 34%, law firms really need to get a hold of their internal and external processes.
Scheme already reducing time to revenue
Richard Powell, managing director at Ryder and Dutton estate agency and member of the Home Buying and Selling Group (HBSG), has been working with the LFS team and the development of Minerva and its “contract ready scheme” for sellers.
“Some of the delays are because sellers have to give a lot of information twice — to the estate agent and to the lawyer. This includes the fact that sellers have to provide ID to both parties, all of which can take a long time.”
“To try and speed this up, we now encourage a vendor to accept a referral to a law firm when the property goes on sale. The legal work on the sale is done on a no sale, no fee basis so there is no risk to the seller in terms of extra costs,” says Powell.
Using Minerva’s innovative portal platform, means clients can complete forms and ID for the law firm and then the data can be shared with the estate agent. The lawyer then orders the searches and the agent can begin to market the property as “contract ready”.
One of the key elements is ordering the searches sooner than in a traditional conveyancing transaction. The cost of the searches is then transferred to the buyer when the deal goes through. This can save four to six weeks from the transaction time.
Ryder and Dutton won’t be the only agents experiencing delays in conveyancing, mortgage processing and searches, where Powell reports that an average transaction time from point of sale to completion, has increased from 12 weeks to 16-18 weeks. With client expectations higher than ever, the need for strict compliance, coupled with social distancing measures, Estate Agents working together with Law Firms and technology partners such as Minerva will only serve to ensure a better experience and conveyancing journey for all.
Change can’t come soon enough, with home movers growing increasingly frustrated by the delays and concern mounting that many will miss the stamp duty deadline as a result.