The government is right to say house buying needs reform. But in its enthusiasm for the seller's pack it is overlooking how fundamentally rotten the system is. A massive shake-up is needed, not tentative tinkering. Local authorities, estate agents, surveyors (and solicitors) all expect their cut from the substantial amounts of money floating around and, with the connivance of mortgage lenders, will continue to get it until there are meaningful reforms.
The seller's pack may speed up the process but there is no reason why it should prevent gazumping. Sellers who have paid for the pack may be even more tempted to raise the price after accepting an offer, knowing that the new prospective buyer will be able to make a quicker decision on whether to proceed.
Little thought seems to have been put into how to make unwilling sellers use the pack. It has been suggested that selling a property without it could be a criminal offence enforced by trading standards officers. This would not be politically acceptable. There is no precedent for legislation making it illegal to draw up a contract in a way that fails to meet with government approval, yet is not dishonest, and if introduced it could fall foul of the Human Rights Act.
That there must be a local authority search is one of the unquestionable assumptions of conveyancing. Most councils charge more than £100 for these. The search amounts to three sheets of answers, stating, say, that there are no plans to build roads within 200 metres of the property and it is connected to the main drains. Compiling the information takes about 15 minutes.
The process can cause delays while councils get around to replying. The long-winded forms of questions give a misleading impression that both the authority and the solicitor making the inquiries are doing some work.
Legislation could require councils to quickly and cheaply answer a single question: Are there any adverse factors known to you affecting this property? "Adverse factors" will mean the matter currently referred to in the inquiries. If the special circumstances of a property call for extra inquiries, then they should be dealt with and charged for separately.
An even bigger bind for those involved in property transactions are fees charged by estate agents. Traditionally, these are expressed as a percentage of the selling price, not a specific amount. One would expect the percentage to fall as the house becomes more expensive, but the reverse applies. Agents in the provinces rarely charge much more than 1%. In the smarter parts of London rates can rise to 2.5%. Fees for selling a £50,000 house in Newcastle might be £500; if the same size property sold in Kensington for £500,000 they could be £12,500.
Overheads are higher in London, but not by a factor of 25. It is hard to see how a truly competitive market would allow such disproportionately high prices in some areas. There has to be a suspicion that agents have an informal understanding with each other that keeps commission rates up. This cries out for investigation by the Competition Commission and Office of Fair Trading, but so far neither have shown much interest.
Surveyors - or at least valuers - are another group who might not welcome too close a scrutiny of their role in the house buying process. "Survey" can cover vastly varied types of report. More often than not buyers rely just on the valuation that their mortgage lenders require. Although this may be prepared by a chartered surveyor, the work involved is neither skilful nor time consuming. A knowledge of the local market will give an idea of value, and a cursory inspection of the premises will disclose whether or not it has any obvious defects. But this is not the way to find out if the seller has been plastering over the cracks.
A structural survey doesn't deal with value, but should tell buyers all they could want to know. Although chartered surveyors can do this, the skills of a structural engineer are better fitted to the task.
On a personal note, when we bought our home we did have such a survey done. It was worth it. The engineer spotted obscure, though potentially serious, defects and we were able to renegotiate the price of the house on the basis of the report. Our mortgage lender, however, insisted that we have a valuation done by a valuer on its "panel". He looked at the property, pointed out the glaringly obvious, that it needed modernisation, wrote a 200-word report and said it was worth the price we were paying - no more than we could have done ourselves.
For that he charged the same as the engineer. It was only the monopoly in the area his position on the panel gave him that enabled him to charge such an uncompetitive rate. It would probably take political pressure, rather than legislation, to persuade lenders to abolish such panels, and accept valuations from anyone suitably qualified.
It has taken nearly three years to get even this far with the sellers' pack project. That delay makes it hard to take seriously claims that the government has the will to really tackle the mess that passes for English house buying.
• Richard Colbey is a barrister
Fight is on to save conveyancing reforms
Phillip Inman
Housing minister Nick Raynsford spent the week battling with estate agents and other critics to save his plans to overhaul home buying and selling. Despite general dislike of the current system, the government has found it hard to gain support for its reforms.
Official figures show that 69% of households in England own their own homes. However, few are satisfied with the stress and uncertainty of house buying and selling .
The proposals are expected to speed up the process and increase its transparency by shifting much of the responsibility for gathering information from buyer to seller.
When the new rules are implemented, homeowners who want to put their house on the market will need to prepare a seller's pack. This must contain title documents, answers to pre-contract inquiries, replies to local searches, planning and building regulations consents, warranties and guarantees for any work car ried out, a draft sale contract and a surveyor's report on the condition of the property.
Packs for leasehold properties will also have to include information about the lease, service charges, insurance and management arrangements.
The changes are driven by concerns that under the present system a high number of transactions fall through after an offer has been accepted.
But not everyone shares the government's enthusiasm for the new rules, despite the claimed success of a pilot in Bristol. Critics say the changes will kill the property market in a single blow by chasing out sellers who are in two minds about whether or not to move.
Some agencies already offer a seller's pack as part of an overall service to sellers, either swallowing the cost of the pack in the overall fee, or deferring the fee until completion. The government expects more agents to join in.
