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There has been an incredible amount of talk in the media about the property market over the last couple of years. As usual the reporting is incredibly negative (predicting house price crashes must be classed as light relief when you spend your day speculating about swine flu, SARs and global warming disasters).

The reporting also focuses on property prices instead of volume of transactions – the two are linked but in relation to the economy the volume is generally more important. Whilst prices are important to those getting onto the property ladder for the first time they are largely irrelevant to people buying and selling (what you lose/gain on one side you gain/lose on the other). Volume of properties sold affects a lot of people though.

The apocalyptic news blitz during 2008 effectively put the brakes on the property market – reducing the number of overall transactions from previous averages of around 1.2m – 1.4m a year to around 450,000 in 2008 – less than half (one source for this is www.houseprices.uk.net).

When the media convinces everyone that prices are plummeting they freeze like rabbits in headlights and don’t do anything (try comparing the predicted 40% price falls with the actual price falls of around 16% in 2008 and price rises in 2009).

The knock-on effect of this was massive – each house move usually involves everything from electricians, to plumbers, DIY stores, decorators and furniture shops. Halve the number of transactions and you’ll dramatically hit their businesses.

I’m not saying that the media created the recession from nothing – there were fundamental problems in the mortgage market that needed to be resolved – there needed to be an adjustment. However the media did take a ‘normal’ house price correction (of the kind we saw at the end of 2004) and turn it into a panic-driven near-collapse of the market to levels we haven’t seen in over 50 years.

So if the media caused ( sorry – substantially contributed to) the reduction in volumes, what’s going to happen next? Is this it? Are we going to remain a nation where only about half a million people move a year as opposed to the 1.2-1.4 million a year for the previous decade

I don’t think so.

The first reason for this is the constant level of transactions over the years. When you look back much further than the recent past (using The office for national statistics you can check the figures all the way back to 1961) you can see that the levels of transactions in recent years aren’t some sort of hyped-up blip brought about by greedy estate agents – they are the normal sort of levels. We haven’t dipped below a million transactions since 1974, and haven’t been as low as 450,000 since before these records began. (Just to avoid breaking up the flow I’ve copied a summary of the figures onto the bottom of this article)

My second reason for saying that we’re not going to stay at these levels lies in why people actually move house in the first place – here’s a list taken from www.articlesbase.com The article is American but the issues mentioned are pretty universal. Anyway, here’s the list of reasons why people move:-

1. Home is too small
2. Downsizing
3. Aging systems and decor
4. Purchase a new build
5. New home build wasn’t as expected
6. Change in family circumstances
7. Retirement
8. Moving closer to elderly parents
9. Seniors moving to retirement homes and nursing homes
10. Health Reasons
11. Neighbourhood changes
12. Commute to work
13. Corporate transfer
14.
Renovating and Flipping
15. Cashing out
16. Financial Stress
17. Difficult Neighbours

Can you see ‘house price changes’ on that list? Me neither. In fact if you look down the list, every factor mentioned involves real factors close to people’s hearts – changes to their day to day life as opposed to abstract worries set out by the media.

Are these factors going to go away?

Nope.

All of these life-changing things are continuing to occur within people’s lives. They will have caused many of them to move home already – but from the overall statistics there are a hell of a lot of people out there would have moved in the last couple of years but for some reason they haven’t (perhaps not helped by scare stories in the media). Their desire to move hasn’t gone away and sooner or later they will be coming back into the market.

So whilst the press and media speculation can cause problems (major ones this time) in the housing market, they can’t take away people’s desire to move house

What about the shortage of money – you can’t get a mortgage these days can you?

Well if you don’t bother looking for one then no you can’t. However 30 seconds on google will throw up a load of deals. The best (i.e. cheapest) deals are available to those who can put down 25%- 35%, but as an example I’ve just seen HSBC bank offering a 4.99% tracker mortgage with no arrangement fee and they will lend up to 90% of the purchase price.

Some people will say 4.99% is high but 18 months ago a rate like that would have been seen as dirt cheap by the whole market. So don’t believe the hype and actually find out yourself what you can get. You can try the search engines or an IFA (Independent Financial Adviser). I’ve had good results through one called Town and Country mortgages

Finally – so what? – I don’t work in the property industry – this is nothing to do with me

Actually it probably has. If you put half a million property transactions back into the market, the knock-on effect on all the peripheral services (I’ve listed them above – electricians, plumbers, DIY etc) is massive, and will help us to start to pull out of recession more quickly – which should be good for most people.

All we have to do then is to stop reading the papers….

Statistics – number of property transactions in millions in England and Wales – 1961 – 2002
(Source: Inland Revenue)

Year

transactions in millions

1961

0.90

1962

0.86

1963

0.94

1964

1.04

1965

0.96

1966

0.92

1967

0.98

1968

1.05

1969

1.01

1970

1.10

1971

1.20

1972

1.34

1973

1.24

1974

0.97

1975

1.17

1976

1.19

1977

1.24

1978

1.37

1979

1.31

1980

1.27

1981

1.35

1982

1.54

1983

1.67

1984

1.76

1985

1.74

1986

1.80

1987

1.94

1988

2.15

1989

1.58

1990

1.40

1991

1.31

1992

1.14

1993

1.20

1994

1.27

1995

1.14

1996

1.24

1997

1.44

1998

1.35

1999

1.47

2000

1.43

2001

1.46

2002

1.59

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Do your own conveyancing    4 Comments
This subject is a bit of an old chestnut with many bar-room lawyers claiming you can save yourself thousands of pounds.

It usually follows comments like ‘Conveyancing’s dead Easy’ and ‘lawyers charge you thousands of pounds for nothing’.

With the rise of the internet letting people do more and more for themselves (I replaced the internal light in my fridge recently after putting up with a broken switch for a year – the web let me order the part straight away and it was quick and simple to replace) – some people will no doubt ask whether they need a conveyancer to do their conveyancing.

The short answer is No – there’s nothing legally to stop you from doing it yourself. Now come a list of ‘gotchas’ as long as your arm which explain why you shouldn’t do it. Before going into these you should have realised by now that our firm specialises in conveyancing. Therefore to paraphrase Mandy Rice-Davies “we would say that it’s a bad idea to do it yourself, wouldn’t we”. If that’s what you really believe then there’s probably not a lot I can say to convince you otherwise. However I’ve written this to be as plain and unbiased as I can. In the words of Nessa from Gavin & Stacey “I won’t lie to you”

So having said you can do this yourself, why would you want to?

Saving Loads of money
Hmmm – not sure on that one. If you get a conveyancing quote from our site you can see how much money we’re making on this. When conveyancing happens, especially on a purchase, there are a number of things that are paid to different parties. People who talk in pubs about paying their solicitors thousands for their conveyancing sometimes don’t realise that most of the money is passed on to other parties. Stamp duty can cost a fortune – you’ve also got the cost of searches, and land Registry fees and so on. I’ve just run off a quote for a purchase at 280K and our fee came to less than 7% of the total costs of purchase (Stamp duty’s the killer). If you do the conveyancing yourself then you’ve still got to pay all this stuff out. The only bit you’d save is what the conveyancer would get as their fee.

Making sure the job is done properly
There’s two sides to this – firstly giving your job the attention it deserves, and secondly technical knowledge on how to do conveyancing.
On the first point you’d think that your conveyancer should be doing the job properly every time. Well yes they should, but people sometimes have bad experiences with their conveyancer and the next time around think that they could do a better job themselves. In terms of giving prompt attention this may be true, in that your case would be the only case you have on, and you will make sure you respond to everything promptly – things that your last conveyancer might have let you down on. Bear in mind though that conveyancing usually involves chains of transactions and it always has to move at the pace of the slowest party.
On the second point, you’ve really got to learn everything from scratch. So as an example if you are buying and searches are included in the HIP (Home Information Pack), will you know how to interpret the results of those searches? Will you know if they are out of date, and what to do if they are? If you have to order fresh searches do you know what form to use? If potential problems are revealed by the search then do you know what to do in relation to them? You may be able to find answers to these questions, but it will take you some time. Your conveyancer should be dealing with these questions every day and know exactly what to do next in every case.
If you’re thinking of doing it yourself because of a poor experience with your previous conveyancer then I would suggest a more practical answer is to choose a better one next time.

How important is this to you
Here I’m talking about the house purchase or sale itself. For most people buying or selling property is the largest financial transaction that they will ever be involved in. It’s therefore important to get it right, as the consequences of getting it wrong could be so serious (see below on this). Now many times the conveyancing transaction will go through without a hitch – there are no problems in the title deeds, no problems with the searches, nothing revealed in the sellers property information forms and so on. It’s great when that happens. I don’t know what percentage of our jobs are just like that – I’d guess maybe 30%. On the other 70% there is something to sort out. With something that important do you want to take a gamble over £500 or so?

I don’t care – I’m definitely going to do this
That’s fine – it’s a free country. The next question to ask then is whether or not a mortgage is involved.
Buying with a mortgage
If you’re using a mortgage to help buy a property then the mortgage company will insist that you have a conveyancer acting on their behalf. If you’re using a conveyancer anyway then they will normally act on behalf of the mortgage company as well. They may make an extra charge for this to you (often called the mortgage administration fee) as extra work is involved. If you’re doing it yourself the mortgage company will insist that a conveyancer acts for them. That conveyancer will make a charge for doing this work and will expect you to pay these legal fees. The chances are that these will be as much as (or more) than if you’d instructed a conveyancer yourself. You also won’t have any choice over which conveyancer is chosen.
Selling where there is currently a mortgage on the property
This also causes problems. On the day of completion the buyers solicitor will want to make sure that if they send you the money then it is going to be used to pay off the existing mortgage first – they are negligent if they don’t make sure this happens. When Solicitors or conveyancers are involved they rely on the undertaking (promise) by the other party to do this. They can rely on that promise because if a solicitor breaches his promise he (or she) can potentially be struck off, and any loss arising from that would be covered by their insurance company. You could instruct a conveyancer to just act for you in taking the money and paying off the mortgage. Their fees for this will have to be big enough to justify them opening a file and taking on the risk – they’ll probably want to know a bit more about the situation before just saying ‘yes’ (we’re paranoid about money laundering now as well). Alternatively the buyers solicitor may agree to do this themselves, but again they may want to make a charge for this. Again this might be a higher charge to encourage you to use a solicitor yourself – by acting on your own you are involving them in extra work that they can’t charge for otherwise.

How hard can it be – it’s only a little flat!
Every conveyancing transaction has the capacity to throw up problems that need to be dealt with – some relatively simple, some incredibly serious. However there are certain sorts of transactions which are by their nature complicated. Leasehold, Commonhold, Shared Ownership, Unregistered, and new build properties are all to be avoided like the plague! OK so maybe that’s slightly overstating it, but the work involved on these sort of transactions can be 2 or 3 times the amount involved on a ‘normal’ freehold purchase. Most conveyancers will make an extra charge for some or all of these situations because of the extra work involved.
For example new build properties contain a lot of deeds because the builder has to set up and create rights for water, sewage, electricity, gas, roads and so on – these all involve long and complicated deeds which can be a nightmare to try and understand. We don’t make an extra charge for these because often when we do a good job on one we start getting referrals on other parts of the site. When you deal with other plots on the same development it takes far less time to go through everything because you’ve already had to do it for the first plot. This is a business decision that we can take in the hope of doing a few plots; if it’s your only transaction then it can be a nightmare.

Practice on a deed of gift – pitfalls!
I’ve seen it suggested that you can practice on a simpler transaction to see how things go and heard a simple deed of gift mentioned as an example. Whilst the mechanics of a deed of gift can be quite simple, even with such a straightforward transaction you actually have to bear in mind the rules on bankruptcy. If the person who is receiving the property sells it in the next 5 years then there is the potential that it could snatched back off them by a trustee in bankruptcy – they have the potential to rewrite any transactions at an undervalue in the previous 5 years which includes deeds of gift (and if they decide that the transaction was done to put the asset out of the way of creditors then there is no limit to how far back they can go). A declaration of insolvency by the seller should help with this, but I just mention that it’s an example of something perceived as simple can actually be more complicated than you think.

When things go wrong – Negligence and Insurance
This is probably the biggest reason for not doing it yourself. If you make a mistake there is the potential for you to be sued OR be stuck with a property that is effectively unsaleable (or both!). All solicitors have to have professional indemnity insurance which means that if their negligence causes a loss to the other party then they can be sued and the insurance company would pay if they couldn’t.

Summary – is it worth doing or isn’t it?
If you’ve read this far then you should know what conclusion I’ve come to – the risks are potentially huge, the time commitment can vary from 30 hours (average time for a lay person to do this) to unlimited (if problems occur), and the financial savings aren’t great.
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