One in three (34%) home buying transactions have fallen through within the last year, wasting almost £2,000 on associated costs in the process, such as surveys, local authority searches and legal fees. The average legal fee has risen by 11% or £140 in the

Journalist: Samantha Downes, Currently at the I (business editing some Sundays (freelance) and Mortgage Solutions

ended 26. July 2022

According to research by Smoove’- ne in three (34%) home buying transactions have fallen through within the last year, wasting almost £2,000 on associated costs in the process, such as surveys, local authority searches and legal fees.The average legal fee has risen by 11% or £140 in the last year, from £1,273 to £1,413 and homebuyer surveys cost £525 on average, up from £465 in previous year.Homeowners spend on average £1,640 on unforeseen moving costs.

What are mortgage advisers doing to help clients - and manage expectations - for Mortgage Solutions



 

5 responses from the Newspage community

When it comes to communication it seems that some conveyancers just simply don't get that it's the most important part of what they do in the 21st century. People want to be kept in the loop and even no news is fine if you can communicate when it's expected that you'll have a proper update. On top of that, some of the factory outfits are not employing competent people or if they are, run at such a tight margin that they take on too much work and good conveyancers crumble under the pressure. What are we doing about it, well we employ a team of admins to get things through slickly and are still turning transactions within 3 months on average against a much higher industry norm. On top of that though, it's gotten so bad that we're launching our own conveyancing platform by brokers, for brokers which will connect brokers to firms that understand the need to communicate and value customer service. Not a sausage factory in sight. We're soft launching in August with a view to going out to the wider community later in the year. Time to take the FML out of the conveyancing process!
Fall-throughs are most often due to one of three things; A buyer can't get a mortgage, something detrimental is uncovered during the transactions within the survey or conveyancing and finally, apathy. Unfortunately, there's nothing anyone can do about buyers' and seller's apathy; however, there are things we, as brokers, can do to ensure we give everyone the best chance at succeeding. The first thing is to ensure the buyer is matched to the correct lender and taking time to do the basics correctly; have you got four months' payslips, four months of bank statements, the most recent P60, a passport, driving licence, credit report and six months evidence of deposit? Then, when buyers have an offer accepted, are you sure they're instructing solicitors on that same day? We complete the legal paperwork with our clients more often than not to ensure it's correct the first time, it's going back to the solicitors with the necessary documents, and the buyers are paying for searches straight away. Like riding a bike, you fall off if you stop peddling as you have no forward momentum; buying a home is no different. The forward movement keeps chains together, which is why our own fall-through rate hovers around the 5% mark. Remember the golden rule taught to all new armed forces recruits as the 7 Ps, Prior Proper Planning Prevents P*** Poor Performance.
The 'holy trinity' of a good mortgage broker, estate agent and solicitor has always been important to the smooth running of a property purchase. This has arguably never been so important with 'Broken Britain' style backlogs hitting the property market as badly as other sectors. The longer any transaction drags on, the greater the chance it will eventually fail. Having good professionals on side is invaluable in keeping things moving forward and achieving a successful outcome.
There isn't a huge amount we can do as advisers to prevent transactions falling through but what we can do is emphasise the importance of using a good solicitor and taking advantage of any homebuyer protections that are sometimes available so that if the purchase does fall through for a defined reason the applicant will be able to claim back some costs they have incurred.
Do your home work! We all do it, get carried away in the moment and work it out as we go along. Unfortunately when it comes to house buying that can be a costly mistake. There are a number of things you can do BEFORE you put in your offer on that dream home, to make it more likely that you will actually end up moving into it. The first and most important is make sure you have the mortgage capacity to buy it. And I don't just mean doing an online calculator! Sit down with a mortgage adviser and run the full figures. Build a spreadsheet detailing your income and expenditure. This will enable the mortgage adviser to give you an accurate idea of exactly how much you can borrow. The second thing is make sure the people selling are actually "motivated to sell". If they have not even started looking for their next property yet you may want to think twice before spending out. Legal fees for conveyancing are on the rise, the reason for this is in many cases? Rapidly rising professional indemnity insurance costs. Conveyancing is very "risky" business for insurance companies and due to issues with leaseholds in general and ground rents in particular they are raising premiums across the board. Conveyancing is already a low margin legal activity so there is little to no scope for firms to absorb this cost so it is being passed on.