Time for more regulation of property deals

PURCHASING A property is one of the largest financial decisions and transactions. It is essential that professionals work for you, safeguarding your personal interests, and that there is no conflict in loyalty as to who is the actual customer.

Yet developers are increasingly ignoring such a key relationship, pushing both their ‘friendly’ home loan brokers and lawyers. Some have threatened to remove promised incentives – notably help on legal costs – if business is not given to named firms.

To appear competitive, rogue developers will provide a panel of conveyancing solicitors but these have all been selected and endorsed. Such lawyers know repeat transactions will follow if they do not upset the apple cart.

A not untypical position is where a developer will advise a potential purchaser that a property is to be remarketed simply because the buyer intended to instruct their own professionals. The developer may defend such a cowboy practice by saying that its approved panel is fully up to speed.

One of the recent scandals is where buyers have unwittingly signed up to contracts where ground rents escalate. An independent lawyer and personal mortgage adviser would have both spotted such subterfuge.

After recent publicity, it appears home loan providers will not release funds for such contracts. This effectively locks the current owner into a property from which there is no escape. The Government has promised to legislate

Amazingly, the housebuilding industry has no independent regulator. There are two bodies – Premier Guarantee and the National House Building Council – which claim to provide consumer protection. Neither is independent as each totally relies on developers for finance.

Codes of conduct have been written which state that restrictions should not be placed on a purchaser’s choice of conveyance or broker. Complaints can be lodged without fee and investigated.