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House
Prices
As
ever, recent news is conflicting but the overall trend suggests that we are
"bumping along the Bottom" of the recession and the general view
is that house prices are likely to stay fairly flat over the next few
months.
Mortgages
You
may remember the property crash in the early nineties when repossessions
rose dramatically as confidence disappeared and unemployment went up
dramatically. After the dust had settled Northern Rock introduced a
new "product": a 90% mortgage secured on the property and an
unsecured loan of £30,000. When we first saw one of these mortgages
in our office we were astounded at the stupidity of such a product.
My first thought was the Emperor's New Clothes! Older readers may
remember the Austin Allegro with a square steering wheel and the ill-fated
Sinclair C5. Hopefully it will be a long time before we return to
100% mortgages – but there are already several lenders offering 95%
mortgages!
Home
Information Packs (HIPs)
The much maligned Home Information Packs are no longer
obligatory and will presumably disappear.
EPCs are still a requirement but the cost of these is much less and
typically £50 or so.
Alterations
and Additions
A few years ago a firm of solicitors was successfully
prosecuted for negligence by clients who bought a property without building
regulations approval for an extension.
The solicitor had failed to warn them of this and their surveyor had
not noticed that the extension was defective and it cost them a
considerable sum of money to rectify the problem. Since then the legal profession have
become completely paranoid about both planning permission and building
regulations approval. If you are
moving house in the near future make sure you have all the necessary
consents and if they are not available you need to speak to your lawyer about
retrospective consent or indemnity insurance.
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COMMENT
The
main problems in conveyancing relate to the inefficiency of all parties
involved:
1. Property
lawyers: at one extreme overzealous, but just as likely to be lethargic
and incompetent. However lawyers are not the main culprits, in fact,
far from it.
2. Estate
agents: No qualifications are required, no previous experience is
necessary and no licence is needed.
Anyone can set themselves up as an estate agent; there is no overall
regulatory body and very little control over estate agents' behaviour
generally (although new laws may help)
3. Lenders:
inefficiency here is the key word, coupled with ignorance and appalling use
of modern information technology, not to mention the general malaise of
high staff turnover and lack of training. In our experience many mortgage
offers are wrong and need to be revised or they are totally inappropriate
for the client's needs. Call centres
predominate and it is rare to speak to someone who understands what they
are doing.
4. Clients:
yes - that's you! You ring us up to say you are in a hurry and we send you
forms to fill in the same day. You ignore these and a week later you
ring us to say "how is it going?" You seem very surprised
that we haven’t started the legal work!
Then you say "do not do the searches until we get the mortgage
offer, but don't tell the seller".
Several weeks later you tell us to start the legal work and can you
move at the end of the week!
5. Surveyors:
a very strange breed altogether. All survey reports are qualified by
caveats such as "I haven't inspected the drains, the plumbing, the
wiring, the central heating, the foundations, or the roof but I will if you
give me more money! If the slightest
defects are found a specialist report will be recommended to avoid the
surveyor accepting responsibility for his work. A surveyor will often charge as much as a
conveyancer for a few hours work, whereas a conveyancer will spend weeks or
even months on a single transaction.
Their
main contribution to the general chaos is to produce a report which states
"the conveyancer is to confirm that all consents have been obtained
for the conversion" without telling the conveyancer what consents
would be necessary. A game of ping pong then results which the surveyor
saying this is a legal matter and the conveyancer saying "I haven't
seen the property - how do I know what consents are needed?"
6. Managing
agents and freeholders; - best described as aliens - they have no
interest in the sale or purchase but will use the situation to make as much
money as possible. They will ask for money to provide information on
service charges, etc. and more money for variations to the lease, and
anything else they can think of.
Leases are often written to enable freeholders and their friendly
solicitors to make money from every conveyancing transaction.
Summary: the English
conveyancing system is a shambles with all parties involved endeavouring to
make as much money as possible at the client’s expense. Any attempts by the government to improve
the system will be a waste of time without controls on all the parties
involved, but especially estate agents who are usually the first port of
call and therefore the most influential. The lenders also need to get their
act together and produce mortgage offers much more quickly.
Ashfords
In
2001 we took over Ashfords, a firm which has been practising since 1971 and
we also moved into their premises in Teddington giving us more space and
better facilities. We are privileged
to be associated with David Ashford, the principal, who took on the Law
Society in the Courts to help break solicitors' monopoly in conveyancing,
giving rise to the creation of Licensed Conveyancers. Ashfords has an excellent record for the
care and attention given to all their clients and this matches our own
philosophy perfectly.
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