“Sheer frustration” sees panel manager launch conveyancing service

 

 

 

 

 

 

 

A panel management provider has launched it’s own conveyancing arm in response to what it describes as a “worrying shortage of firms willing to commit to delivering a market-leading service.”

Elite Conveyancing started life as a conveyancing panel manager which introduced strict protocols designed to encourage firms to work more closely, thereby reducing timescales and improving the client journey.

Six years on, Elite Conveyancing has launched its own law firm. Carl Brignell, CEO of Elite Conveyancing explains

“Our sole aim has always been to deliver the best service within the marketplace, I knew that once we achieved the service then market share and profitability would naturally follow. Other providers within the industry I’m sure all share the same aims although arguably in a different order and this is why the conveyancing industry is in the state that it is today.”

“In all honesty the law firm was never part of our original business plan but has been born out of sheer frustration from the lack of other law firms willing to commit providing a true service-focused conveyancing model, to protect their lawyers from taking on too much work, and to recognize and reward their conveyancing lawyers for the amazing work they do.”

According to Mr Brignell Elite Conveyancing’s new law firm has been set up to allow all of their lawyers to work remotely with a centralised administration team on hand to provide full support behind the scenes. It has adopted a digital first approach and employs a strict capacity management strategy to ensure the “Elite” service remains sustainable.

Cryptocurrency – can you buy a house using it?

 

 

 

 

 

 

 

 

 

 

 

A look into the world of cryptocurrency and buying houses, we ask whether it’s even possible in the majority of cases, given the extra risks at play with Bitcoin

 

 Recent years have seen the boom, bust and boom again of alternative currencies, which can be lucrative for investors but also famously volatile and unpredictable.

But are cryptocurrencies – the best known of which is Bitcoin – a legitimate means by which to purchase a property in the UK?

Here we take a closer look and explore what the future could be for property and cryptocurrency.

Can you use digital coins to buy a home?

Some 12 years after bitcoin was first launched, recent commentary suggests that investors are still finding it very difficult to use their digital money to purchase a house.

It can be hard to document bitcoin in the same way as a traditional pound sterling deposit, and mortgage lenders are told to report any deposit that appears too odd or large – something that crypto investments can fall foul of, leading to the need for further verification.

Buyers may find that lenders and conveyancers are unwilling to accept cryptocurrencies when it comes to purchasing a house because of the extra risks and suspicion at play.

Daniel Browne, a senior associate at London-based law firm Kingsley Napley, told the Financial Times recently that there is currently very low appetite for sellers to accept cryptocurrencies throughout the UK. As a result, if people want to use their crypto investments towards a house purchase, it will typically mean converting the cryptocurrency into government-issued currency like sterling.

Much of the reluctance to accept cryptocurrency comes from its well-publicised association with criminal activity, in particular money laundering.

In a recent advice column on whether cryptocurrencies could be used for house purchases, the FT said that, although most lenders are unwilling to lend money where some or all of the deposit is made from the proceeds of crypto, there are some big high street names who are now prepared to do so. This includes Nationwide, the UK’s biggest building society, as well as Halifax and Barclays. Buyers seeking to use crypto are recommended to search for a crypto-friendly lender as early in the house buying process as possible, as they may be more difficult to come by.

Even once this stage has been traversed, however, and you’ve found a lender willing to accept the likes of Bitcoin or Ethereum, buyers are likely to find it very difficult to secure a conveyancer willing to accept crypto.

That’s because conveyancers are required, under strict money laundering regulations, to implement measures to identify who their client is and verify that the funds they receive from a client are not proceeds of crime.

“This means that the provenance of the crypto assets must be understood, including the way they have been traded and with whom,” the FT advice article said. “This typically involves the instruction of an expert who is able to carry out a full audit on the crypto proceeds being used. That audit can then form the basis on which the conveyancer can make a judgment as to whether it is safe to proceed with the proposed transaction.”

There are firms out there who do, but they will be very hard to come by and very much in the minority. Before you commit to attempting to buy a house using crypto funds, you should first make sure you have a lender and conveyancer willing to accept this form of payment.

Has it been done?

There are isolated examples of homes being bought through cryptocurrency in the UK, but they are still very much the exception rather than rule. Buying homes via Bitcoin certainly hasn’t gone mainstream, as some might have expected by now.

In the rental sector, co-living brand The Collective started accepting deposits and rent in Bitcoin as far back as 2017, but it’s not 100% clear if this is still the case and it hasn’t really spread far and wide to other providers in the lettings sector.

Meanwhile, in the sales market, purchases made via cryptocurrency have been extremely rare – and unique stories as a result of that.

Back in December 2017, property developer Go Homes became the first to sell homes in the UK using Bitcoin, while the odd agency here and there has said they will accept Bitcoin to act as a USP. There have also been a number of luxury properties with have gone up for sale only accepting offers in Bitcoin.

On the whole, though, it remains highly niche, with worries over money laundering putting many agents, conveyancers and lenders off, not to mention the amount of due diligence and verification that is required in comparison to a normal house sale.

What about the future?

Some believe, with millenials more likely to invest in Bitcoin rather than traditional stocks and shares or placing their money in the savings accounts of high street banks, that mortgage lenders will simply have to start accepting crypto more readily to meet increased demand.

Research published by Charles Schwab UK earlier this year found that over half of young UK investors are now trading cryptocurrencies, while a further 70% view it as a ‘good investment’. However, there has been a push back against the rise in crypto investing, with the Financial Conduct Authority spending considerable sums on a campaign warning of the dangers of investing in cryptocurrencies.

Crypto companies can be notoriously difficult to regulate, with often a reluctance to work with regulators, which in turn makes the market potentially more vulnerable to nefarious operators. There have been a number of high-profile cryptocurrency scams which have played on the fact that many see it as a quick, easy and lucrative way to make lots of money.

Chris Sykes, associate director and mortgage consultant at Private Finance, told FT Adviser that he doubts UK lenders will accept bitcoin any time soon. 

“From looking at US clients' bank statements, often US mortgages work very differently to UK ones. Where UK mortgages are paid 99/100 by direct debit to the lender, in the US it seems that applicants physically send the money to their mortgage lender on a monthly basis,” he said.

As mentioned above, only a few lenders in the UK allow people to use crypto as a source of deposit, and even fewer allow it for the mortgage repayments themselves. Until this changes, and crypto becomes stable, trusted and mainstream – in the same way that banks are largely viewed, despite their own issues – then it will remain very difficult to buy a home using crypto in the UK. Especially given the fact that most conveyancers are reluctant to accept it and there aren’t many developers or agents happy to consider the digital asset, either.

If you’re a buyer looking to fund your purchase with crypto, you may strike it lucky and find a lender and conveyancer willing to help you, but this is likely to require a whole heap of research and is certainly something that is far from guaranteed.

For now, the traditional way of buying with pound sterling is king, but if cryptocurrency continues to grow at the rate it has over the last decade or so, this could start to change – with the buyers and sellers of tomorrow potentially being more comfortable in a world of digital coins.

How Long Does the Entire Conveyancing Process Take?

 

The conveyancing phase is a crucial part of the entire buying and selling process of any property. 

If you want any transaction to go smoothly, it needs to undergo conveyancing just like any other property on the market. However, don’t expect this to happen overnight or even in a matter of days. This article should help you get a better idea of how long the entire conveyancing process takes and what to expect from it.

The Conveyancing Process

Generally speaking, conveyancing is going to take anywhere between 8-12 weeks if it goes without any issues. The entire process itself involves a lot of moving parts in the form of documents and paperwork. More often than not, there are many parties involved, not just the buyer and the seller.

The main reason why commercial and residential conveyancing takes a long time to complete is because of several factors that can slow down the sale, which is often beyond the solicitor’s control. Conveyancing firms aren’t usually the ones causing the delay. In fact, it’s in the conveyancing firms’ best interests to process things quickly so they can accommodate more clients. To better understand why the process takes too long, let’s break it down, step by step.

1. Pre-Contract Work (1-2 Weeks)

The moment you accept an offer for a house, or you’re the one who made the offer, and it got accepted, the conveyancing process begins. Both the buyer and seller will need to appoint their own conveyancing solicitors to help them obtain and review the legal documents involved in the sale. If you’re the buyer, your solicitor will speak to the other party’s solicitor for the draft contract and start local searches. This alone could take more or less ten days. However, when local authorities miss their deadlines, this could take up to several more weeks.

2. Mortgage Offer (2-4 Weeks)

Hopefully, before you made an offer on the property, you had a Mortgage Agreement in Principle in place. As your solicitor is processing the searches and the contract, next comes your mortgage offer, which relies on your mortgage lender. This process takes about a month from your application.

3. Drafting a Contract (2-10 Weeks)

While all the other processes are happening, the next step is drafting a contract. This is one of the most arduous parts of the conveyancing process because you need to work with your solicitor to get all the necessary paperwork from the land registry and the seller’s conveyancer. You may have the results of the local searches already done by now, which could also raise some issues that need to be resolved.

4. Exchanging of Contracts (2-4 Weeks)

After all the other processes are done, it’s time to exchange contracts. This could take a week or two or even more, depending on how fast both parties are able to exchange and review the contracts. Even if you finished reviewing everything, you wouldn’t be able to proceed until the seller is also done reviewing their contract. After review and completion, only then can you set a completion date.

Three Easy Steps to Protect Your Property From Fraud

Property fraud is on the rise and your property is probably the most valuable asset you own so it is important to protect it from the risk of fraud.

People are increasingly falling victim to property fraud because the tactics fraudsters use are much more sophisticated.   Fraudsters are targeting properties by pretending to be you so they can try and sell or mortgage your property.

The Land Registry advise that you are more at risk if your property is one of the following:

• Rented out
• Empty
• Mortgage-free
• Unregistered  

Over the last 10 years around £55 million has been paid out under the Land Registry indemnity scheme because of forgeries.  Do not become a victim of property fraud and take these easy steps.

Firstly, you should make sure that your property is registered at HM Land Registry. Your property will be registered if you bought it or mortgaged it since 1998. If you are unsure, you can check with the Land Registry who will be able to confirm whether it is registered.  If your property is registered and are a victim of property fraud where you suffer financial loss, you will be compensated through the Land Registry indemnity scheme.

If your property is not currently registered with the Land Registry, then you can apply voluntarily for this to be registered.  The Land Registry charges a discounted fee for voluntary registrations and we can prepare these applications for you at Brethertons.

Once your property is registered, you must then keep your contact details up to date. You can include an email address or an address abroad.  Keeping contact details up to date is particularly important if you do not live at the property and have moved addresses since the purchase.  Many Landlords with Buy-to-Let properties often overlook updating their rental property contact details when moving home themselves.  

The second step is to sign up to the Land Registry Property Alert Service which is completely free of charge www.gov.uk/property-alert .  Once you have signed up to this service the Land Registry will notify you of certain applications affecting the property you are monitoring. You will receive a notification for example for a new mortgage or change of ownership.  You can monitor up to 10 registered properties in England and Wales. You don’t have to own the property, so could monitor the property for an elderly relative for example.

Alerts are normally sent by email but, you can still use the service if you are not online. If you receive an alert about an activity that seems suspicious you should take immediate action and contact the Land Registry Fraud Line.

Thirdly, if you feel that your property is particularly at risk from fraud then you can apply for a restriction to be placed on your property designed to help prevent forgery. The restriction prevents the Land Registry registering a sale or mortgage on your property unless a conveyancer or solicitor certifies the application was made by you.

It is important that you do what you can to protect your property.  

 

5 reasons why digital connectivity should be a priority for all conveyancers

 

 

 

 

 

 

 

 

The importance of digital connectivity for the future of conveyancing

The property market is a diverse ecosystem of multiple professions operating independently. Estate agents, conveyancers, mortgage brokers and lenders provide individual services throughout a property transaction, but unlike other industries such as banking, they aren’t connected by a universal digital network.

The lack of digital connectivity in the property market creates challenges and additional administrative work for conveyancers that hinders efficiencies and productivity. Conveyancers often find themselves using disparate systems and communication channels to rekey data, chase – and be chased – for updates, and check data for consistency to progress a transaction.

During the last 18 months, the unprecedented volume of transactions created by the SDLT holiday meant that trying to keep on top of those additional manual tasks was a challenge, resulting in many conveyancers working into the night to complete transactions by the SDLT deadline. Something that isn’t effective for conveyancers in the long-term when managing workloads.

Connecting in a hybrid-working environment

The importance of connectivity is heightened further with many businesses and professionals across the property market moving to a hybrid-working environment. Firms, departments, and clients are now more physically disconnected than ever before, which only emphasises the need for a digital connection to effectively communicate and collaborate.

Conveyancers can’t continue with siloed data, disparate systems, and disconnected operations because it slows down processes and affects scalability and profitability. It increases the risk of errors, which can lead to unsatisfied clients and increases a conveyancer’s workload of administrative tasks. It also takes up time that otherwise could be spent nurturing client relationships or winning new business.

Of course, not all digital connectivity is equal. Having hundreds of APIs doesn’t give you a ‘single source of the truth,’ just a reconciliation headache. Data that is collected digitally, but not in real-time, may not be up to date. Connectivity needs to be secure – it matters who is seeing it on the way from source to destination. Finally, true connectivity is two-way; it ensures the connection allows both parties to share data with each other.

5 reasons why digital connectivity should be a priority for all conveyancers 

The future of conveyancing is digital, which invites opportunities for improving the connectivity of the market. A digitally connected property market will help to improve the workloads of lawyers, increase the profitability of law firms, but importantly remove the friction and pain points within a property transaction for clients. Listed below are five benefits for digitally connecting data and systems across the market.

1. Visibility and accuracy

Connecting various property software platforms through one network creates a single source of truth for all actions, updates, and key information within a property transaction. When platforms, processes, and data are connected you immediately reduce the need for manual intervention which reduces the risk of errors. Synchronising your data with other parties helps provide visibility across your firm and ensures accuracy. The right network enables you to easily share that data with clients and third parties too. When everyone is working from one source of truth, all parties can be confident their data is accurate and ensures everyone has visibility of progress.

2. Efficiency

A goal for most law firms is to drive long-term efficiencies, and digitally connecting and streamlining your operations is one of the crucial ways you can improve efficiencies and the profitability of your firm. Remove the time-consuming and manual admin tasks involved in keeping records up to date, chasing third parties or updating clients and run your firm through a centralised platform that can act as the core for all processes and data to be stored and shared. A practice management system connected in real-time will help to significantly speed up a transaction and make it incredibly easy to share updates with all parties. When your conveyancing processes are streamlined, you improve the scalability of your firm so you can grow without working late into the night or without additional overhead costs.

3. Enhanced communication and collaboration

A truly connected property market can instantly improve communication and collaboration across all parties. With secure, real-time connectivity conveyancers can be confident that the data they are sharing and receiving is accurate without needing to manually review it. Connectivity helps to automate the communication needed between parties so diary reminders for updates are a thing of the past and data is effortlessly shared. Conveyancers can work quicker with access to everything they need at their fingertips so they can focus on progressing a transaction, not maintaining its data.

4. Client satisfaction

Online property search platforms, like Zoopla and Rightmove, are leading the way for removing friction and pain points throughout the property transaction. By providing a digital self-service platform they put the client back in control of their experience and provide the tools they need, when they need them, to sell and buy a house. Consistent connectivity across the property market will help reduce friction points further helping conveyancers to deliver an effective and transparent service that exceeds client expectations and removes the familiar challenges of buying and selling a property.

5. Security

If all parties involved in a property transaction had full visibility from their existing software solutions, it would significantly reduce the need for email and phone updates. By reducing your reliance on email communication, you increase the protection and security of your client data. Connect using a secure network and all data remains within your existing platform with controls on who can access it, you’re reducing the need for human interference, therefore, reducing the risk of errors.

The future of conveyancing

To improve efficiencies for your firm that positively affect your bottom-line, to streamline workloads for lawyers and third parties, and to enhance the client experience and reduce the time it takes to buy a property, the property market needs to get connected. The future of conveyancing is a secure, real-time, synchronised network of connected platforms, processes, communications, and data that enables an effortless and streamlined transaction, benefitting all involved.

Digital connectivity should be the number one priority for conveyancers looking to future-proof their firm as it provides new opportunities and possibilities. A connected network of moving parts improves scalability, growth potential and success and it also enables flexibility and adaptability.

 

Average house prices are starting to fall

The average price of UK houses has fallen by £ 10,000 in July compared to the previous month, this has been put down to the market cooling after the final part of the stamp duty is coming to an end, the average house price is still around £256k and around £18999 higher than the previous July average this data is taken from the office of national statistics.

The huger rise has been put down to the holiday that was given to house buyers the 1^st July 2020 to June 2021 up to £500,000 purchase price  and then from the 1^st of July until 30^th September 2021 it was reduced to £250,000 purchase price .  On the first of October it will fall back to £125000.

If the purchaser was purchasing as a second property they would still benefit from the holiday as the first part of the stamp duty up to £500,000 was still not payable only the 3% on the second property part of the stamp duty .

The savings on a property based on 1 property owned after completion between July 2020 and 30^th June 2021 £500,000k purchase price

Stamp duty 0

Stamp after end of Sept £10000

If it was a second property buys to let or second home after completion between July 2020 and 30^th June 2021 £150000

If it was a second property buy to let or second home after completion after end of September 2021 £30,000

As you can see the saving was a lot on 1 home or buy to let , the issue was this stimulated the market so pricing went up and in a lot of circumstances the increase in property price wiped out the saving .

According to the ONS data, average house prices rose at different rates in the four UK nations over the year, with the largest increase, just under 15%, in Scotland, where the average reached £177,000.

In Wales, the increase was almost 12%, taking the average price of a Welsh home to £188,000, while 9% was recorded in Northern Ireland, taking the average house price there to £153,000.

House prices climbed at the slowest rate in England, by 7%, although the nation records the UK’s highest average at £271,000.

London remained the region with the lowest annual growth (2.2%) for the eighth consecutive month.

Soaring house prices over the past year have pushed home ownership further out of reach for many people, said Nitesh Patel, a strategic economist at Yorkshire building society.

 

Stamp Duty changes

 

 

 Stamp Duty Land Tax (SDLT) is the payment of tax required if you buy a property or land over a certain price in England and Northern Ireland.

There are particular thresholds which determine just how much SDLT is due starting at £125,000 for residential properties. If you are buying your first home however, you get a discount which means you pay less or no tax at all, subject to certain criteria. If you are buying a second home or adding to your portfolio of properties and not replacing your main residence, a surcharge is required on top of the usual tax payment.

Along with the required payment, you must file a return to HMRC this being, on their required forms, a breakdown of the transaction, the property and the parties to the transaction.

Not all transactions require a filing to be made for example those where no money changes hands, property is left in a will or property transferred as a result of the dissolution of a marriage or civil partnership. However, if none of these circumstances apply, even of you are not paying any stamp duty, a filing must be made so as to declare the transaction to HMRC.

Currently, the SDLT filing and payment deadline is 30 days. This means you have 30 days from the ‘effective date’ of the transaction to file the required forms to HMRC and make the required payment to them. The effective date is usually the date the transfer is completed but it can be the date the contract is ‘substantially performed’ be this when the majority (at least 90%) of the purchase price is paid, the buyer becomes entitled to possession or the first payment of any rent due has been paid.

Should the filing and payment deadline of 30 days be missed, there are varying penalties that may be enforced. Inaccuracies in the filing and payment will be scrutinised by HMRC to determine to most suitable penalty. Fixed penalties are charged if the filing or payment is made after the current 30 day window but within 3 months it. This penalty is currently £100. In all other cases the penalty is a fixed £200. For late payment, interest is also charged.

In the Spring 2017 Budget it was announced that HMRC would reduce this filing and payment window to 14 days. It was then announced in the Autumn 2017 Budget that this change would be applied to transactions with an effective date on or after 1st March 2019.

Whilst SDLT is a self issuing tax, meaning it is the responsibility of the individual to ensure the correct amount is paid and filing is made, in most instances the solicitor or licensed conveyancer will undertake this as part of the usual conveyancing transaction having obtain authority on the file from the clients to do so.

The implications for conveyancers and solicitors moving forward is that we will have a shorter window to ensure the correct filing is made and payment is sent. Here at Brethertons, during the course of the transaction, and at the point of signing Contract Papers ahead of exchange of contracts, we ask the client to review, check and sign their approval of the required SDLT forms pertaining to their transaction, we also report to them with a draft completion statement so they can confirm their acceptance of the tax being paid on their behalf. This means that following completion we are able to promptly submit the filing using the HMRC SDLT Portal and instruct our accounts team to send out the payment to HMRC. Doing it this way not only negates the risk of late payment penalties and interest but also allows the very maximum amount of time should HMRC have any queries on the filing. Therefore, whilst we will be mindful of the reduced timescale when it comes to our clients tax obligations, it will not require any change in our day to day processes in the Conveyancing department.