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Government goes online to shake up conveyancing process

Online only estate agents could hold key to new dawn in real estate sector

30 November 2015

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The government has announced plans to modernise the consumer approach to home buying to ensure a smoother conveyancing process.

In its proposal on boosting market competition to help consumers and businesses, the government has pointed to research which shows home buyers incur costs of around £270m each year when their transactions fall through.

This extra money was said to be spent on legal fees and surveys with many other sales subject to costly delays leading to increased fees. Businesses trying to buy or sell commercial property are also said to be affected.

The UK is currently ranked 45th for registering property in the World Bank's Doing Business index and the government thinks improving performance will help unlock more economic growth.

The government wants to analyse the development of the real estate and conveyancing markets around existing regulation, encourage greater innovation in the conveyancing sector, and make the legal process more transparent and efficient.

Encouraging new business models, such as online only estate agents, is key to enhancing price competition in the real estate sector, the government believes.

Online estate agencies could give conveyancers the opportunity to build new businesses.

Writing in SJ earlier this year, Mark Riddick, the chairman of Search Accumen, suggested the disruption caused by the digital age in other industries could be replicated by online estate agents.

Already, virtual agents such as PurpleBricks and eMoov have cut consumer costs and made the process more efficient.

PurpleBricks claims to save the average customer £4,572 compared to other estate agents and conducts 70 per cent of its activity when it is closed. It hopes to float on the stock market in December at around £250m.

The government will publish a call for evidence in the new year on home buying, exploring options to deliver better value and make the experience of buying a home more consumer friendly.

Matthew Rogers is an editorial assistant at Solicitors Journal | @sportslawmatt

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