Making The Conveyancing Process Fit For Consumers

The results were difficult reading for many property sector stakeholders with current processes taking too long to complete. As the average time between listing and completion stretched beyond 19 weeks, current processes were deemed to be in need of significant restoration and overhaul.

Similarly, a seeming lack of transparency, poor digitisation in the sector and historically inexperienced buyers led to fall through rates of up to a third, encouraging the Government to look to the sector to find solutions which would improve the consumer journey and instil greater buyer and seller confidence in the process.

The Government Response

Prior to the Government briefing paper, the Ministry of Housing Communities and Local Government (MHCLG) was massively concerned about the need to prevent the 30% fall through rate from increasing beyond the current estimated annual loss of £270 million.

During the summer, MHCLG green lit a ten-month research project into and trial of reservation agreements in the home buying and selling process.

Their Initial research found a lack of consumer confidence in the home buying and selling process with 46% of sellers and 33% of buyers concerned that the other party will change their mind about the sale before it completes.

Furthermore, 70% of buyers and 66% of sellers went into the transaction thinking it would fail to reach completion.

MHCLG believe that a financial bind following the acceptance of the initial offer could help to commit both parties, vastly reducing the dropout rate.

Recently, the Government announced that a trial into reservation agreements will take place in the early stages of 2020 which could lead to them coming into law sooner rather than later.

Creating a Digital Landscape

The legal sector has been accused of being slow to respond to digital technologies and consumer demand.

Over a third of businesses and almost half of people using legal services expressed a demand for online communication and services, according to a report conducted by the Solicitors Regulation Authority (SRA).

The report also suggested the legal sector was beginning to catch up with the demand for improved technological services. Nearly a third of all legal services are now available online or by email to some extent; this figure increased to over half of conveyancing services.

Law firms are also acknowledging the benefits of legal technology in improving efficiency and speed of transactions. 40 of the top 100 UK law firms have incorporated the use of Artificial Intelligence (AI) systems into their active files and over a fifth now offer a portal style system so that the buyer and seller can review the conveyancing process in real time.

HM Land Registry has also embraced the use of technology to improve the efficiency for all property stakeholders. Earlier this year, the 1,000th digital remortgage was completed. Whilst this system is currently restricted to remortgages, digital processes could well be the inevitable future.

Similarly, HMLR are spending huge amounts of time sifting through historic paper documents in the hope of digitising the local land charges information.

Last summer, Warwick District Council became the first local authority to digitally migrate their information. Since that time, seven local authorities’ LLC data has become entirely digital with 6,500 searches being completed in the process.

However, inevitable snags have slowed the progress of further migrations with 61% of the 295,160 charges being uploaded in need of amending to some extent.

At the current migration speed, HMLR have intimated it would take over 18 years to migrate all 316 local authorities in England. Despite the glitches in this system, the immediacy of digital searches and the increased efficiency benefits will ensure this service increases its coverage in the future.

Whilst lawtech is sporadic at times, the sector could be at the crest of a technological wave about to revolutionise the way legal services are provided to the modern consumer.

Providing Compliant Facilities to Consumers

Even though the legal sector could be set to enjoy a raft of products and services which will improve the home buying and selling process for all stakeholders, law firms are still struggling to ensure pre-engagement services, like websites, are fully compliant with price and service transparency regulations despite being almost a year old.

Following a recent review of SRA regulated firm websites, only a fifth were fully compliant with regulatory changes. 34% also failed to provide an accurate quote to the consumer with standard fees and disbursements omitted despite their consistent use.

The Council for Licensed Conveyancer also found a high level of non-compliance amongst the firms it regulates. Following an inspection of 54 law firms, 34 (62%) were non-compliant with price and service transparency as well as anti-money laundering compliance issue firms are struggling with.

When 71% of consumers are now shopping around for their legal services, many firms are obstructing the efficiency of the pre-engagement stage by failing to provide basic information, like price, to the consumer.

Regulators could do more to educate firms on the benefits of pricing and service regulations and how it can increase sales rather than it being seen as more red tape distracting them from essential work that has to be done.

Disabled consumers have also stated that similar obstacles are restricting access to legal services. Over a third of disabled consumers in need of legal advice refused to access professional help because it was viewed as too complex with the legal sector failing to simplify the process according to an SRA survey of over 3,500 respondents.

Inexperienced, scared or unhelpful staff (24%); unclear and confusing legal language (18%) and law firms failing to consider the diverse communication needs of their consumers like braille or larger font (15%) were all seen as sever barriers to accessing legal services amongst disabled consumers.

The SRA has since recommended that law firm websites become easier to navigate and that all communication methods are offered to consumers to help improve the speed and accessibility of communication for all.

Speeding up searches

Amongst the majority of criticisms involving the property sector, the time it takes to complete a transaction has been a consistent issue.

Conveyancers have come under fire for not asking their clients for vital information upfront or ordering searches to late in the process contributing to delays. Conveyancers themselves have expressed the blame lies more on the how long it can take for Local Authority Searches to be returned. Both arguments have their merits, with all stakeholders needing to accept accountability for the part they play in delays while also recognises there needs to be better communication by all.

Conveyancers now have access to more tools / technologies than ever before, allowing to offload a lot of administrative tasks that prevent them from focussing on the client experience. Matter Centre can help with its automated workflows which can help ensure junior conveyancers are following the same steps every time and ordering searches earlier, asking important questions upfront and increasing communication with clients. Automation of Land Reg searches, SDLT submissions and Property Searches means less time is spent on filling our forms and more time is spent on having meaningful conversations

Supporting conveyancers

With the Property sector being so vital to health of the UK economy, the government is right to examine issues that have led to increased listing and completion times.

There also has to be some recognition that conveyancing margins are shrinking while regulatory requirements and customer demands are increasing. Putting the pressure on conveyancers to do for less will ultimately cause further delays and further issues. More support to help law firms adopt technologies would be welcome by most involved and was recently acknowledged in the Law Society’s LawTech Adoption Research Report.

We will continue to do what we can to provide a seamless and superior conveyancing search service to our clients recognising our role in the home buying process. We will also continue to invest in our conveyancing software to provide cutting-edge technology at a fraction of the cost what’s already out there. Together we can improve the process and rebuild some of the recently lost consumer confidence in the sector.