Charlotte EdwardsBusiness reporter, BBC News
Plans for a major reform of the housebuying system, which aim to cut costs, reduce delays and halve failed sales, have been unveiled by the government.
Housing Secretary Steve Reed said the changes would “fix the broken system” and put more money “back into working people’s pockets”.
Under the new proposals, sellers and estate agents will be legally required to provide key information about a property up front.
The overhaul could save first-time buyers an average of £710 and cut up to four weeks off the typical property transaction timeline, according to the government.
It is estimated that hundreds of thousands of families and first-time buyers could benefit from the reforms.
Those in the middle of a chain could also potentially gain a net saving of £400 as a result of the increased costs from selling being outweighed by lower buying expenses.
The consultation draws on other jurisdictions, including the Scottish system where there is more upfront information and earlier binding contracts.
This will include being up front about the condition of the home, any leasehold costs, and details of property chains.
The government says this transparency will reduce the risk of deals collapsing late in the process and improve confidence among buyers, particularly those purchasing a home for the first time.
Binding contracts may also be introduced to prevent parties from walking away late in the deal, a move intended to halve the number of failed transactions, which currently cost the UK economy an estimated £1.5bn a year.
“Buying a home should be a dream, not a nightmare,” said Reed. “Our reforms will fix the broken system so hardworking people can focus on the next chapter of their lives.”
The reforms will also aim to boost professional standards across the housing sector.
A new mandatory Code of Practice for estate agents and conveyancers is being proposed, along with the introduction of side-by-side performance data to help buyers choose trusted professionals based on expertise and track record.
The government said a full roadmap for the changes would be published in the new year, forming part of its broader housing strategy, which includes a pledge to build 1.5 million new homes.
Housing expert Kirstie Allsopp, the presenter of Channel 4’s Location, Location, Location, told the BBC’s Today programme she was “really glad the government has grasped this nettle”.
She said it was important to focus on both the buying and selling sides, “because things fall through because buyers walk away just as much as sellers walk away, and I think that was a worrying element”.
The boss of property website Rightmove, Johan Svanstrom, welcomed the plans to modernise the system.
“The home-moving process involves many fragmented parts, and there’s simply too much uncertainty and costs along the way. Speed, connected data and stakeholder simplicity should be key goals.”
However, Conservative shadow housing minister Paul Holmes said: “Whilst we welcome steps to digitise and speed up the process, this risks reinventing the last Labour Government’s failed Home Information Packs – which reduced the number of homes put on sale, and duplicated costs across buyers and sellers.”
The announcement comes as the Conservatives are set to detail changes to its tax policy for first home buyers at the party’s conference in Manchester.
The party will lay out plans to “reward work” by giving young people a £5,000 tax rebate towards their first home when they get their first full time job.
Shadow chancellor Mel Stride will announce proposals for a “first-job bonus” that would divert national insurance payments into a long-term savings account.
The party say it will be funded by cuts to public spending worth £47bn over five years in areas such as welfare, the civil service and the foreign aid budget.