The Government is planning to digitalise data shared during property sales to tackle hold-ups in transactions and streamline the house-buying process.
The changes aim to modernise the “cumbersome” process by allowing information that is often paper-based or not machine readable to be shared more easily.
The Government has announced a 12-week project to decide on the “design and implementation of agreed rules on data” so that it can easily be shared between conveyancers, lenders and other parties involved in a transaction.
“We are streamlining the cumbersome home-buying process so that it is fit for the twenty-first century, helping homebuyers save money, gain time and reduce stress while also cutting the number of house sales that fall through,” housing and planning minister Matthew Pennycook said.
It is part of Labour’s plans for housing which also including overhauling planning rules, building 1.5 million homes and reforming leaseholds.
Legislation will be introduced next week to give leaseholders power over the way their service charges are spent.
When buying a home, conveyancing typically takes several weeks, but waiting for documents needed for property searches and other parts of the process can delay it.
Rightmove said it takes five months on average from an offer being accepted to moving into a property, and that “digitising” the property market is key to helping speed this up.
A “fully digitalised” home buying and selling process would mean mortgage companies and surveyors can access the information they need immediately with identity checks only carried out once, the Ministry of Housing, Communities and Local Government said.
Building control and highways information are among the documentation needed that is predominantly paper-based or not machine readable.
A lack of protocol for accessing, sharing and verifying data that is available electronically also contributes to holdups, the ministry said.
The ministry will work with HM Land Registry (HMLR) and experts from the Digital Property Market Steering Group on the 12-week project.
The Land Registry will also lead 10-month pilots with councils focused on opening up more data and making it digital.
Plans for digital identity verification services also aim to make property transactions move forward more quickly.
As part of leasehold reforms, secondary legislation for the Right to Manage measures in the Leasehold and Freehold Reform Act 2024 will be laid on Monday and come into force on March 3.
They will give leaseholders powers to decide how their service charges are spent and remove the requirement for leaseholders to cover the legal fees of their freeholder when making a right-to-manage claim.
Matthew Pennycook vowed to help house buyers (Richard Townshend/UK Parliament/PA)
This could save them up to £3,000 for the most costly claims and reduces the incentive for landlords to obstruct the process, the Government said.
Mr Pennycook said the reforms would allow leasehold homeowners to “more easily and cheaply take control of the buildings they live in and clamp down on unreasonable or extortionate charges”.
Rightmove chief executive Johan Svanstrom said: “Digitising the property market is key to helping speed up the moving process.
“If the plans set out today can further the access to information and an improved transaction process, it’s also critical to drive industry-wide adoption of tech solutions and collaboration to make it a success.
He said the company’s latest data shows it takes five months on average from having an offer accepted to moving into a home, on top of the initial two months it usually takes to find a property and agree an offer.
“The current process also contributes to an average of more than one in five home sales falling through, and hopefully a better process can help reduce this as well,” he said.