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In the second instalment of our evolving tech world article, Paul Albone gives his 3 top tips on how best to protect your firm from a cyber-attack and discusses the value placed on accreditations within the industry. Click here to read part 1.

Q. What are the three critical things that firms must do to protect against cyberattacks?  

1. Make all your staff aware of the threats of cyber-attacks

Cyber-attackers use malicious code and software to alter system behaviour and data, resulting in disruptive consequences that can comprise a firm’s systems and lead to cyber-crimes such as information and identity theft, or systems being compromised. 

Cyber-attacks come in many guises, so invest the time and effort in training all your staff. There are a number of good online interactive courses to test and measure staff awareness of cyber-attacks.

2. Find your network and system weak spots that could be exploited by a cyber-attacker 

Normally, this takes the form of an independent security vulnerability test by an external supplier. When choosing a supplier, always ensure they are CREST accredited. The CREST scheme assures a firm that the supplier follows strict testing processes for network and system security assessments. The test findings will help a firm prioritise and plan any security vulnerability remediation measures required.

3. Protect your firm with a solid insurance policy

Take out a stand-alone cyber insurance policy, ensuring that it provides your firm with access to a 24/7 incident response team and, as with any insurance policy, ensuring that you understand what is and is not covered.  

Q. What would you recommend as a good starting point when it comes to improving IT performance?

I would start from the business view and work inwards to IT. For example, is there a clear “line of sight” from the business goals into the IT roadmap? Without this, there is a high probability that valuable IT resources are working on low value, non-important activities.

Then, ensure the fundamentals are in place by measuring KPIs, activities and progress. Are IT operations providing the right level of activity and keeping key stakeholders within the firm informed? If not, establish regular reporting covering both high-level and detailed views. 

It’s also important to regularly inspect a system’s performance metrics at all levels in the system infrastructure. How are systems performing? Where are the hot spots? What are the most commonly occurring errors being raised in the system? 

Once you’ve determined this, ensure the IT roadmap has a continuous system improvement plan running right across it to address these issues. Proactive and regular corrective measures are always better than responding to sudden system incidents that can cause significant disruption to a firm.

Q. What is the value of accreditation (such as ISO 27001) and how do you achieve this status?

Our tmgroup journey towards ISO 27001 accreditation originally stemmed from our GDPR compliancy programme. For this, we ensured demonstrable processes were in place to protect the data held on an individual. This involved a comprehensive assessment of our data, processes, controls, risks, protection and privacy across our entire IT systems landscape. As part of this, we reviewed and updated all of our information security management policies and privacy policy. 

For ISO 27001, the key requirement was to demonstrate that our information security management is under control and in place on an ongoing basis. Our accreditation means that tm have passed the strict security requirements set by ISO 27001 in the integration, management and storage of our clients and internal data.

We also have Gold Partner status with Microsoft, which sets us apart as a high calibre business partner and assures our clients that our solutions are designed and developed to the highest standards.

With thanks to Paul Albone, COO at tmgroup

Ever wanted to know how IT teams can evidence their value? Here, in the first of 2 articles, Paul Albone, tmgroup’s Chief Operating Officer (COO), answers pivotal questions on everything from integration to how smaller firms can make the most of their existing IT resources to keep pace with the competition. Be sure to keep an eye out for part 2!

Q. How do firms with a small in-house IT resource keep up with their larger counterparts?

Play to your strengths and be agile. 

Small in-house IT teams are able to rapidly respond to the firms ever changing needs, whilst larger IT counterparts certainly have the scale, but the proportional increase in potential challenges and communication breakdown, bureaucracy and system complexity can slow down responsiveness and agility.

Q. How can IT teams evidence the value they bring to a firm?  

IT teams should consider what they are able to do for a firm over other alternatives. Being in tune with the firm’s needs and delivering repeatedly and consistently are crucial to demonstrating value.

Furthermore, IT teams should assess what key performance indicators exist between IT and the business. Having clear expectations set between the firm and the IT team is important to ensure IT stays focused on what is important to the firm.

Q. How do firms effectively integrate new platforms with legacy systems that may have been in place for many years?

Firms must assess risk before changing any element of their legacy systems. High risk approaches involve legacy systems being changed in-situ to integrate with new platforms and invariably lead to unnecessary complexity and instability of legacy systems. 

Instead, adopt an approach whereby a “wrapper” is built around the legacy system, usually in the form of an API or web service, so that the new platform and legacy system can interact with each other without affecting the underlying functionality of the legacy system.

Q. How can firms effectively evaluate the systems that are on offer to work out which ones are right for them?

Whether it’s a new case management system, CRM or any other system, firms can fall into the trap of focusing on “what” the system can do, rather than what the firm “needs” the system to do.

When choosing a system, always work from the outset of what the firm is trying to achieve as a successful outcome. Involvement and buy-in from all representatives of the firm is paramount to ensure all needs are considered. This will help define clear goals and the success criteria the system must meet.

Also consider requirements such as system performance and availability needs, multi-firm access, support for smartphones or tablets, API availability and data integration. Then look at the systems on offer and always set up a trial with the supplier – with success measures agreed upfront.

Q. How should a Chief Information Officer (CIO) cultivate a partnership between IT and the rest of the business?

Chief Information Officers (CIOs) have traditionally been seen as an internal facing leader of IT. Instead, businesses now need their CIOs to act as consultants to the business, able to seamlessly work across the business, their clients and internal teams to translate the business goals into delivery across a firm’s products and data. They should also consider the ever-present aspects of risk, compliance and security. To make the partnership effective, CIOs must make their plans clear and understandable to all.

Q. How can IT teams communicate effectively with their colleagues in other departments to manage change effectively?

Managing change effectively requires keeping messages clear at all times – whether this is to communicate the direction taken, or update the team on progress and challenges faced. 

Visual tools such as roadmaps, project plans and progress trackers with a simple Green, Amber or Red status are highly effective for communicating with colleagues in other departments. 

Aim to keep visuals at a high-level, so that messages can be understood easily at all times. Communication tools such as Microsoft Teams or Trello are extremely effective for providing real-time information to colleagues in a collaborative environment.

CLS have advised us that they will be increasing the prices of their Legal Indemnity Insurance on 19th August. 

As pricing is policy dependent, please use the tools on our ordering platform to check the new pricing before purchasing your policy.

CLS offer Legal Indemnity Insurance products available for both commercial and residential property transactions.

If you have any questions, please get in touch with your Account Manager or our friendly Helpdesk team on 0800 840 5571 or helpdesk@tmgroup.co.uk

Following on from the publication of the 2019 NatWest Legal Benchmarking report, David Weaver, Commercial Head of Professional Services at Natwest spoke to tmgroup to share his advice on how law firms can make themselves more profitable.

1. Benchmark your own firm’s performance on a regular basis
Firms want to be the best at everything, but this is clearly unrealistic. Firms tend to talk about what they are good at and try to get even better at this –rather than focussing on areas of under-performance where improvements might more easily be achieved.

So when you benchmark your own firm, focus on the areas where your firm is currently below the upper quartile figure and think about what needs to be done to achieve better results.

Reports, such as the NatWest Legal benchmarking report, allow you to determine how your firm is performing when compared with firms across the UK, firms within your region or firms of a comparative size. 

2. Always measure profit – instead of focusing on fees and time

Profit is the most important measure, as it is the profit that is shared amongst the partners. Many firms focus too much on fees and time recorded and not enough on profit.

Historically, this has been because firms have always found it easier to measure fees billed than to calculate the profit earned for different types of work for individual matters and for different fee earners. This has resulted in some strange behaviours – with many partners being too focused on the size of their fee portfolio and with less focus on the profit being made. 

It is clearly important that growth is profitable growth – and not arising from poor quality and unprofitable work. There are too many firms who make the mistake of thinking that if they continue to grow they are bound to become more profitable.

It is important in all firms that there is constant measurement between the fees generated per fee earner with the salary cost of that fee earner. The danger is that as fees increase, the cost of the fee earners will grow at the same or an even faster rate – and there will be no improvement in profitability.

3. Stop letting fee-earners get dragged into non-fee earning

One of the issues that will influence profitability is the relationship between the number of fee-earning and non-fee earning staff. Fee earners need to do the fee earning and should not be dragged into more non-fee earning work than is necessary.

Maybe firms should be looking to increase support numbers or employ some more business development professionals to help fee earners to become more productive. Fee earners will never be fully productive if they have to spend too much time doing business development activities – even if they happen to be good at it.

4. Review your gearing and put some rules in place

Gearing is the total number of fee earners per equity partner (total fee earners – including equity partners – divided by equity partners). Clearly, if a partner can manage a larger team, then they can bill more and make more profit through that larger team, while if the partner just works alone there is a limit to the billings that can be generated, and the profits earned. 

Gearing has generally increased year on year in the legal sector and whilst it’s encouraging to see this number rise, this figure should not be increased until everyone is working at capacity – as it’s always better if additional work can be resourced with the existing fee earners before recruiting new people.

If gearing is to improve, then perhaps there needs to be a rule that when a file is opened at least two fee earners must be allocated to the file.

It is too easy for one person to do everything – and the consequences will be lower gearing and poor efficiency. Often the senior lawyer is personally incentivised to do the work on their own, as they need to achieve a certain number of recorded hours. Incentives need to be linked to the desired behaviours.

5. Invest in your recruitment and retention

It is important that everyone in the team is very good, so that everybody can trust everyone else. Partners therefore need to commit more time to recruiting the best people, to developing these people further and to ensuring that they remain at the firm for longer.

Many managing partners comment on how they can attract and train good people, but who then often move on after qualification. Developing your own people and keeping them for longer should improve both client service and profit margins.

Want to find out more about making your law firm more profitable?

Take a look at the 2019 NatWest Legal Benchmarking report

Want to find out more about the challenges facing New Build developments in the UK? Here is a collection of some of the latest research; showing the extent of the issue alongside proactive solutions for a better future. 

Addressing Our Housing Shortage: Engaging the Silent Majority

Shelter : March 2015

Although a little dated (2015) this report highlights some of the persistent challenges around the building of new homes. 

Key findings include:

• There is a sharp contrast between those who support homes being built in their local area, who are typically renters and shared owners, compared to the ‘outright owners who tend to oppose homes being built in the local area – reflecting the extent to which these groups are affected by the shortage of housing.

• Active opposition and support are more common among people living in rural areas, highlighting that housing is more hotly contested in these areas.

• The main reasons for opposing local housebuilding are pressure on local infrastructure and services, particularly roads, and the loss of green space. Loss of green space is more important to younger people, pressure on local infrastructure to older people.

• Actively opposing or supporting a local development is not particularly common – 86% of people have not done either.

Bringing home ownership back into reach: Assessing the Help to Buy Equity Loan Scheme after five years

Home Builders Federation : September 2018

This report summarises the positive impact the Help to Buy Equity Loan Scheme has had not only in helping First Time Buyers onto the property ladder, but driving a new wave of New Build housing supply.

Key findings include:

• Because Help to Buy is exclusive to new build homes, demand for new properties has increased since 2013, and builders have increased the number of homes delivered to better meet this demand. Since Help to Buy was introduced in 2013, net housing supply has increased by 74% to similar levels seen in the 1950s.

• The extra demand for new homes has seen unprecedented increases in investment by house builders in land and labour with planning permissions up by 88% over this period, clearly demonstrating a continued appetite by developers to sustain the recent increases in supply and deliver more new housing over the next three years in particular.

• Whilst transactions in the wider housing market remain subdued (down 21.4% on 2006 levels) activity in the new build market continues to rise. New builds now account for almost 15% of mortgaged housing market transactions compared to a long term average of 8.2%.

• Unlike previous attempts at such schemes, Help to Buy has been accessible to builders large and small, with over 3,000 companies, the vast majority of them small local builders, now registered.

Improving the home buying and selling process : Summary of responses to the Call for Evidence and government response

Ministry of Housing, Communities and Local Government : April 2018

Although not a dedicated report on New Build, the summary of responses to the Call for Evidence did include discussion around New Build (page 48 onwards). 

Key findings include:

• Over 13% of all respondents said that developers should provide a fixed completion date for the build and give more information about expected timescales. 

• Over 6% of respondents argued that developers should be regulated and an ombudsman set up to enforce these regulations. 

• Where something goes wrong, house builders and warranty providers should fulfil their obligations to put this right. 

• The Government are keen to improve redress for people who experience problems with their housing and to make them feel empowered to challenge poor practices when things go wrong. 

• 15% of respondents stated that buyers should be encouraged to secure a Decision in Principle before they make an offer on a new-build property. 9% of all respondents stated that developers and lenders should have pre-approved mortgages, valuations and/or surveys for new builds.

• The Government is clear that buyers of new build homes should not be placed at a disadvantage when compared to purchasers of second hand homes - and will continue to work with lenders and mortgage brokers to discuss specialised products for the new build market, including an extended Decision in Principle.

Rebuilding Trust: Discussion Paper

Grosvenor : July 2019

This research report explores why the public doesn’t trust the planning system, developers or local authorities when it comes to large-scale developments and their impact – and what could be done to begin creating better relationships and more trust for everyone’s benefit. 

Key findings include:   

• Just 2% of people trust developers to act in an honest way in large-scale development, and only 7% of people trust their local councils. That they only care about making money and do not care about the needs of the local community were key driving factors behind this mistrust. 

• A demand for more transparency throughout the planning process was also highlighted. 

• There is often a clash between high expectations and reality. Developers might be expected to fund social housing, for example, without regard to the commercial feasibility of doing so.

Hard Choices : How much should the nation spend on building new homes?

London First : September 2018

This report reviews the current spending on building new homes and what needs to be done (in real terms) to address the funding gap. 

Key findings include:

• Looking at the current capital cost of delivering new housing in England, it is estimated that the current cost of delivering 300,000 homes a year in England is c. £67.6bn. Compared to current investment of c. £47.9bn, this is a c. £19.7bn increase, or 40%. 

• Viable options for filling this gap, ranging from the Government filling the gap, the private sector filling the gap, or exploring the possibility of a mixed economy – where the Government increases its capital spending on housing delivery, while also creating a more enabling policy framework to encourage greater levels of private sector investment.

• The historic under supply of housing has placed significant upward pressure on the cost of housing, which has contributed to the current affordability crisis.

• There is a consensus across all the major political parties about the extent of, and challenge presented, by the housing crisis. There is agreement that more homes must be built, but a divergence of views as to how this might be achieved.

We spoke to industry experts – including Rob Hailstone (Bold Legal Group), Alan Milstein (Residential Property Surveyors Association) and Eduardo Reyes (The Law Society Gazette) – for their views on what needs to change to get Britain building, speeding up New Build transactions, and meeting the demand for more housing. 

Here’s what they said…

Eduardo Reyes, Commissioning and Features Editor at The Law Society Gazette:

We need to create greater density in outlying areas of cities and invest in our transport links

In the 20th Century, my home city of London achieved growth in homes in a way that has created challenges for future development. Many other cities and towns share this experience. In particular, the 1930s saw a boom in housebuilding, fuelled by new, widely available mortgage products. 

This great democratization of finance delivered huge swathes of housing, though a significant proportion was built in areas that were poorly-served by infrastructure, including transport. Hence, they remain part of the city’s great sprawl. 

We need greater density in outlying areas, of our cities and towns, and that means creating or improving attractive ‘town centres’, using vacant land, and improving our transport links. 

‘Section 106’ is inadequate and needs to be reformed 

‘Section 106’ – the mechanism by which developers reach agreement with councils on the provision of infrastructure and community facilities – needs to be reformed. It has proved an inadequate way to deliver the infrastructure and facilities needed to create new centres. 

One result has been further rings of development around older established centres – a sense of identity and convenience getting more diluted the further out you are, so the incentive for more rapid growth is reduced. 

Further out, we too often wind up with freestanding housing developments with low densities, which do not sit in any cultural or economic context other than a road trip to work and shops.

‘Section 106’ agreements are too often superficial, prettifying add-ons to new developments. A more powerful and reliable mechanism is needed.  

We need to tax unused land to stop people sitting on it as an investment

Tax law needs reform. Development potential increases the price of land even before homes are built on it. It has become a helpful asset for some businesses to sit on, including both supermarkets and developers themselves. We need to find a way to tax such unused land at a level that will bring it in to ‘use’.  

New laws keeping the cost of retail space down would help to create new centres with a heavier density of homes and businesses

Stricter Paris-style ‘designated use’ laws on commercial property, chiefly shops, should also be considered to keep the cost of retail space down, and its variety up – and such spaces should be designed into new centres. This strengthens the idea of a new ‘centre’, around which a heavier density of homes and businesses can grow, because people will sacrifice space to be near them. 

The high streets in my bit of South East London often have lower-cost retail units than seen elsewhere in inner London, and it has made a renaissance for independent businesses possible  – some wildly successful, others just optimistic try-outs, all of them adding to the convincing fabric of the place. 

Christopher Watkin, UK Property Market Commentator:

There should be incentives in place for building inexpensive homes

There has been a shortage of smaller townhouses and smaller apartments being built in the UK over the last 20 years. The builders do want to build, but there's a deficiency of building land in the UK, and if there's a shortage of building land, then of course new homes builders build whatever gives them the biggest profit. The properties that give them the largest profit are the biggest and most expensive properties and they certainly are not bungalows as they take up too much land. So who can blame them?

Yet would it surprise you to know that it’s not a lack of space (look at all the green you see when flying over the UK), it’s the planning system. Green belts must be observed, but only 1.2% (yes 1.2% - that isn’t a typo) is built on in this country as a whole with homes – we need the planners to release more land (and then force/encourage builders to build on it - not sit on it). Another problem is that of the smaller new homes that have been built, most of them have been snapped up for renting, not owning. 

So, what’s the answer? Build more Council houses? Yes, sounds great but the local authorities haven’t enough money to cut the grass verges, let alone spend billions on new homes. The Government did relax the planning laws a few years ago, for example for changing office space into residential use, yet they could do more as currently new homes builders have no incentive to build inexpensive homes or bungalows that the system needs to make a difference.

We must all remember that property will always be a great investment

Changing the dynamics of the national property market will only change in decades, not years. The simple fact is we are living longer, and we need 240,000 to 250,000 houses a year to stand still with demand, let alone start to eat into 30 years of under building, where the average has been just under 170,000 households a year. 

That means, today as a country, we have a pent-up demand of 2.25m additional households and we need to build a further 4.2m households on top of that figure for population growth between 2019 and 2039. So, irrespective of whether we have a short term blip in the property market in the next 12/18 months, investing in property is, and always will be, a great investment as demand will always outstrip supply.

Dominic Woodward, Director, Tri-core Developments:

We need to invest in our planning departments so workload, holidays and sickness breaks stop being a roadblock for planning applications  

The main roadblock is the planning system. Getting planning through in a timely and cost effective way is not straightforward. The planning portal says 13 weeks for a complex full planning application to be decided, but those involved in the system know this is not the reality. 

Routinely, consultation responses are not provided in time due to workloads, holidays and sickness breaks for those persons involved. This requires planning officers to request an extension of time meaning the clock stops before the stated deadline. Planning applicants have little choice but to accept these requests for extension, as refusing the request to extend means the application will be determined “as is” resulting in a guaranteed refusal – leaving developers between a rock and a hard place. 

Cut-off dates for consultation responses and more rights for applicants – even at the cost of more expensive planning applications

Providing cut off dates for consultation responses could help, and in the event responses are not provided by the cut off, that department loses the right to comment on the proposed application. It would be a “use it or lose it” right for consultees to get their comments in on time. This is the case at appeal, so should be no different for an actual planning application.

In addition, there clearly should be more rights for applicants to get applications decided on time. The ombudsman that covers planning has no teeth, the default position seems to be if you have cause for complaint, just go through the appeals process. That will add 6 months to 1 year – plus all the additional costs associated.

Although likely not popular, we would actually be happy to pay more for planning applications to have a better funded system – but only on the provision of getting a better service that delivers decisions on time. The system is woefully underfunded, there aren’t enough planning officers (bums on seats) and those that are there usually end up leaving to work privately for better money, only worsening the problem.

Alan Milstein, Chairman, Residential Property Surveyors Association (RPSA):

Industry-wide snagging standards could make all the difference 

In the rush to build more houses, it is almost inevitable that question marks are raised over quality. Often buyers are given only a 15 or 20 minute accompanied tour on the day before completion to point out any snagging issues, which may, or may not be rectified before they move in. 

Stories of new homebuyers subsequently finding hundreds of snagging issues, as well as far more serious structural failings, are disturbingly common, and the rectification process is all too often a battle against an uncooperative major corporate developer.

The Residential Property Surveyors Association (RPSA) believes that protection for consumers can only come about by the development of industry-wide snagging standards to facilitate an objective and accurate assessment of quality to be made, allowing builders to know what is expected, and an Ombudsman to have a measure against which to make adjudications.

Bringing developers and warranty providers to the table to begin the task of creating proper snagging standards has proved challenging and slow. Understandably, perhaps, builders don’t want to accept the need for snagging standards because, according to their figures, satisfaction rates against new home owners significantly exceed 90%. But the reality is that a worryingly high number of new homebuyers experience a moderate or significant number of snagging issues and find the rectification process to be difficult, lengthy and, often, highly confrontational.

Matt Smith, WPB and The Chair Consultancy:

We need a National Housing Service to protect British citizens’ wellbeing

We need a National Housing Service. Housing is as integral to the wellbeing of British citizens as health and yet it is treated with almost contempt by those in Westminster –  something which needs to be adjusted if we are to improve policies. 

This is not a new suggestion. Countless government-commissioned reviews, leading economists and industry trade bodies have lobbied for years in favour of setting up an independent housing body – akin to the Financial Conduct Authority or Bank of England, but tasked with measurable targets to deliver a set number of new homes every year. Critically, to also think long-term about the tenure make-up of the UK’s housing market. Our need has never been greater.

We need to start building for everyone – not just for capital gain

Britain needs to be strategic and even-handed in housing, focusing the attention on helping the young and balancing out the housing market. Looking beyond the five-year mark, we need to encourage the delivery of every tenure. Policy changes are required and should be our focus. As the age of home ownership continues to rise, building for everyone must become more important than just building for capital gain. 

Policy must genuinely support all tenures. With over 1 million people on social housing waiting lists, we must recognise that institutional and affordable housing are worthwhile endeavours and encourage greater investment into purpose built rental homes. We should also remove the additional 3% SDLT multiple dwellings premium, as this would increase the affordable housing contribution. 

Precision-engineered modular homes could help to build high quality homes for the future

The supply in the housing market needs to adjust and recognise the need for more, advanced labour forces, in order to keep up with the growing technological advances and more control at local level. 

Mark Farmer published a report into the UK’s construction labour model entitled ‘Modernise or Die’. He identified the need for innovation to solve the skills crisis, and claimed that “We have so big a challenge around the declining workforce in construction that we cannot recruit or retain our way out of it. We have to be prepared for a reducing workforce, which means we need to be able to build more with less”. That means new ways of building for the future.

All in all, the demand for change in this market is high. The real challenge will be democracy ‘buying into’ the change. However, innovation and planning for the next 50 years would help. Our current housebuilding industry is capacity constrained and can’t possibly meet the 300,000 annual target. Precision-engineered modular homes offer a new way of building high quality homes - in volume and faster than traditional construction. 

Joe Pepper, CEO at tmgroup:

It will require real vision and leadership to help address the problem

Why is building new homes so difficult?  After all, as a nation we have been through terrific periods of house building in the last century, so what has happened to us to make it so difficult now?  The answer is multifaceted, but in essence we have made the planning laws increasingly complicated and reduced the number of firms competing to build, whilst at the same time leaving it more to the market.

The roots of many of the current issues go back to the 1980s, when the government erroneously believed that the population was likely to decline over the coming decades. This led to a massively reduced element of social housing development, and a tightening of conservation law around where property could be built. This combined with the subsequent periods of boom and bust, caused a disproportionate displacement of smaller developers contributing to the dominance of the larger developers that we see today.  

Given the length of time that it takes to navigate the local planning laws, a developer has to invest at risk for a long period of time before they can be confident of getting a return, and that gives the bigger and more established developers a significant advantage and creates a blocker for new entrants. 

The ongoing disparity between supply and demand also fuels the house price growth, which dis-incentivises further growth.  As time goes on, the problem only builds up, and as the government also benefits from the growth in house prices, it will require real vision and leadership to help address the problem.

Removing communication barriers could help to improve the situation in the short term

At a more prosaic level, we can seek to improve the communication between all parties – developers, local authorities, conveyancers, estate and land agents and so on.

At tmgroup, we have been linking local authorities and conveyancers for almost 20-years, and have recently extended that to estate agents and consumers through our mio platform. 

We are also in active dialogue with lenders and developers about extending it further which would give all parties the real-time status of a deal without the associated chasing around which currently happens.  

It doesn’t take much imagination to extend that further into the planning process to save time for all parties both during the process and during the subsequent sales transaction.

Rob Hailstone, CEO, Bold Legal Group:

New Build property transactions can be significantly helped along by homebuilders choosing their developer’s recommended conveyancer

Back in the 90s, I was recommended many, many times by the ‘site girls’ of a large developer in the South West. 

They liked me to be instructed because: 

• I had already been through the site documents and had (with the developer’s solicitors) corrected anything that I felt wasn’t right, and was therefore quicker than a conveyancer who had to trawl through the sale pack for the first time.

• I was prepared to be proactive rather than reactive.

• I gave regular updates.

• My fees were competitive. 

• I would even walk the site at various stages with the developer’s solicitors to get a clear picture of the lay of the land, etc…

In short, I knew the development inside out.

On a number of occasions, I had to push back when something was wrong or didn’t suit a particular client. Did the developer like it, no, did I care they didn’t like it, not at all! If anything, I actually earned their respect. However, I am sure one ‘site girl’ in particular (Gloria) still spits feathers every time my name is mentioned because she missed her target on more than one occasion when I insisted something needed changing. The majority of conveyancers are professional and not easily swayed from the duties that they owe to their clients. Being recommended by a developer to act for their buyers should not, therefore, be an issue. After all, they act for buyer and lender more often than not, and cope well with any conflict there.

Want to share your thoughts on industry events, trends and predictions?

Get in touch with our marketing team on marketing@tmgroup.co.uk to find out more about adding your voice to our next panel discussion.

Here’s a sneak peek at what we’ve got planned for our tmconvey platform in the months ahead to help save you and your team even more time in the property transaction. 

Even more mapping enhancements

Following on from the addition of HS2, Crossrail, Overseas Corporate Ownership Data (and more), we’ll be enhancing our tmconvey mapping even further with…

• Boundary alerts

Our mapping will soon be able to alert you when any Local Authority boundaries are close to the subject property, or when a property happens to straddle a boundary, so you spot any unusual cases in advance and better understand the local searches you’ll need to order. 

• Reset button

We’re enhancing our drawing functionality with a new reset button, so you can easily remove an outline and redraw it as many times as you need to. 

• Undo button

We’ll also be adding an additional button to allow you to undo your drawings step-by-step, so you can tweak the outline as and when you need to.

New integration partners

We’re proud to say that we already have good working relationships with law firms to provide integrations with CMS providers SOS and Visualfiles. 

However, we’re also in conversation with Tikit, Peppermint, Mattersphere, Linetime, Proclaim, Osprey, Ochresoft, InTouch Legal and Sharedo to support further integrations.

Improving the end-to-end search ordering process 

We’re always listening to our customers as we continue to evolve our tmconvey platform. In extension of this, we’re currently in consultation with several law firms about how we can make our search ordering process even better. 

Keep an eye out for tweaks and changes across the year that will make it quicker and easier for you to order your searches. 

If you have any questions, please get in touch with your Account Manager or our friendly Helpdesk team on 0800 840 5571 or helpdesk@tmgroup.co.uk 

tmgroup spoke to Paul Addison, Managing Director of DevAssist about Strategic Housing Land Availability Assessments (SHLAAs), and how understanding where there is development potential is just as critical as advising clients on current planning applications.

Nearly ⅓ of properties have a high risk of development in their proximity

I think the first thing you really need to know is that nearly ⅓ of the property purchases you are consulting on, have a high risk of development in their proximity. Furthermore, this risk is not always made clear, so if this risk is unknown to the client at the point of purchase, are you responsible? 

You could well be. In an economic climate where we are all increasingly risk averse, a risk of unforeseen development for your clients is a risk to you. Claims against Professional Indemnity are one of the most common contributory factors to solicitors going out of business. 

‘95% of homebuyers are concerned about unforeseen development in their neighbourhood.’ (Institute of Economic Affairs)

Purchasing a property, only to discover too late that there is a significant risk of development nearby, can and does result in clients taking legal action against their solicitors. Unfortunately, we’ve only seen the rate of these claims increasing. Clients are placing responsibility for interpreting planning data, with their conveyancer. The landmark case which really shifted the perspective across the whole industry was the Bird & Bird case in back in 2014. 

Law firm Bird & Bird had been instructed to purchase a high value property in North London. However, they had failed to disclose to the client that a planning report had contained information regarding a substantial development planned nearby. The client did not learn of this development until after the contract had been signed and deposit to the vendor paid. Upon discovery, they pulled out of the sale and took Bird & Bird to court to recoup costs invested so far. Ironically, the development was nearby but would not have adversely affected their property. In court, Bird & Bird took the stance that they were not under any duty to provide the report. Regrettably, having felt they had followed protocol correctly, the judge took the side of the client. Bird & Bird lost the case and were ordered to pay £1.8m in damages plus interest.

So how do you protect your firm and your reputation?

My advice to conveyancers is always the same. You need to be accessing all the data available to you and not relying on planning data reports alone. Strategic Housing Land Availability Assessments (SHLAAs) are a land viability exercise undertaken by local councils. This assessment of land availability identifies a future supply of land which is suitable, available and achievable for housing and economic development uses. This is an activity taking place in all of our local neighbourhoods with a real risk of impacting us all, but so little attention is paid to them. This is of course great news for developers, but worrying for homeowners. For those that aren’t yet in the know; 

The assessment will:

• identify sites and broad locations with potential for development;

• assess their development potential;

• assess their suitability for development and the likelihood of development coming forward (the availability and achievability).

How does this affect you and your clients? 

Sites that have undergone this assessment are significantly more likely to be approved for planning permission. However, here’s the real catch, SHLAA’s are not reported in standard searches or planning data. If your firm only commissions the basic searches, you will be missing vital information regarding potential development. 

In addition to this, the planning data you receive is usually provided as raw data. This makes the data complex to interpret and in my experience, doesn’t give you the full picture. 

Important development insight is contained in the planning data but often, any risks of development to the property you are interested in, are not easily identified. This is due to the geo-coding of the data, making the proximity of planned developments to the property of interest, unclear.  It is often the case that planning data will identify a development proposal in the neighbourhood, but mislead you about how near that development is to a subject property. On a planned development of 2,000 homes, the geo-coding could be set to any point on that large acreage – likely some distance from the property you’re looking at. When in reality, the development is going to extend as far as the bottom of your client’s garden. 

The only way to extract the real risk of, or proposed development and its proximity to a property, is to assess the planning data alongside the SHLAA research. 

How likely is it that your clients will be affected by unforeseen development? 

Very. Particularly in the ever-shifting and evolving urban environments. Our research indicates that purchasers and investors have a 20% chance of experiencing major or significant change in London. In Manchester, this rises to 42%. We can’t always avoid development or the risk of it, but we can be better informed. 

Rooms without a view

Just last month in Folkestone, we were commissioned to deliver a report on a subject property which enjoyed uninterrupted sea views. The apartment was to be a retirement home and the views were the primary attraction for the buyer. We identified two high risk development proposals, just metres from the property. One of these proposals had already received planning permission. The approved development was for a large modern apartment block that would obstruct the sea views entirely from the property - see image below. 

These developments were not picked up in the standard conveyancing searches that had already been undertaken.

It’s not just the sea views under threat of course. We recently delivered a report for clients in Warrington. The property was a country cottage that boasted enviable rural views and a quiet location.

Our report ascertained that there was a real risk of development in the immediate vicinity of the property. Our report identified that the area as a whole has been considered for Garden City Suburb development and that one site, bordering the subject property had already been promoted through the SHLAA process. This insight wouldn’t have been exposed in standard conveyancing searches and was critical to the client’s decision on whether to proceed with the purchase.

Be informed 

I feel passionately that you can only take responsibility for the information, if you have the full picture. If your searches do not contain SHLAA data, you are missing a vital piece of the puzzle. This omission of data has been a source of huge frustration for me over the years and hence the establishment of my own company in this field. 

Discovering unforeseen development is not a rarity either. You and your clients will be impacted by development, as we are a small island in dire need of more housing! However, we can be more informed about our changing neighbourhoods, and in turn make more informed decisions when it comes to buying properties.

For more information about DevAssist, visit www.devassist.co.uk or get in touch with your tmgroup Account Manager. 

tmgroup spoke to Rebecca Kibby, CEO – Conveyancing Services, and Yanthe Richardson, Senior Associate, at Foot Anstey LLP about the biggest roadblocks to meeting “that 28 day deadline” – and what could be done to address them, including:

• Addressing the AML problem

• Improving the lending process around New Build incentives

• Better managing communication between all parties (especially when there’s a developer involved as well)

• Improving collaboration across property professionals, so even complex chains help to meet that 28-day deadline

• Finding an easier and faster way to manage the Help to Buy process

Q. What is one of the biggest causes of delays and frustration with New Build transactions? 

AML! Property professionals connected across a New Build transaction are at the mercy of industry-wide processes that extend far beyond what one profession can influence or control – and AML checks are a classic example of this. 

Anti-Money Laundering (AML) checks are inescapable, due to the high risk around residential properties and the heavy regulation in place for managing that risk. Whilst no one would question the “why” of performing AML checks, the challenge is in the “how”. 

Currently, homemovers have to provide personal information to all of the different stakeholders – from their mortgage broker and Estate Agent, through to their developer and solicitor – so each can conduct an AML check. This is irritating and time-consuming for everyone involved. 

For conveyancers, the situation is exacerbated by the need to also obtain “proof of funds”, and subsequently investigate everything from their client’s income, to their financial story and wealth check, which explains how a client has come to acquire funds into their savings account. It’s complicated and intrusive, especially as clients don’t always provide the correct information up front; resulting in lots of back and forth and significantly eating into that 28-day timeframe. When clients are receiving a gift, very similar checks are then repeated for the donor of those funds compounding the delays further.  

Q. What’s the solution to “the AML problem”? 

If each homemover had to complete just a single AML check at the very start of the property transaction and this information was shared across all parties, the process could be dramatically improved.

Unfortunately, this is easier said than done, as each profession is governed by their own regulating body – and, as they all have varying requirements for AML, it would be challenging to switch to a “one size fits all” format that every profession could rely on.

Even if this were immediately possible, the technology isn’t yet in place to share this data securely – although Blockchain certainly has the potential as a viable solution, so watch this space! 

Q. What else complicates New Build transactions – compared to second-hand home transactions?

Incentives… It is quite common in the sale of New Build properties that an incentive is offered to help “seal the deal” – including white goods and help towards Stamp Duty payments. Whilst fantastic for the buyer, this prompts further work for the conveyancer in complying with the lender's requirements – adding another roadblock to the progression of the sale.

Why? If an incentive is offered as part of the reservation, lenders need to know about it to ensure that it doesn’t impact value. This is because, historically, lenders have suffered losses in the event of a house being repossessed, due to not knowing about the incentives in place, which may have artificially inflated the overall assumed property value. Therefore, it has become part of a conveyancer’s due diligence to report on such matters and for developers to provide a CML Disclosure of Incentives Form (now UK Finance). 

This should be simple – but sadly, it isn’t. As each lender has different requirements for reporting on these matters, conveyancers have to double check Part 2 of The UK Finance Handbook (which is subject to regular changes) to progress every transaction – and can often wait on hold for up to an hour if they have a query for the lender over the phone.  

There is certainly room for improvement. The ideal solution would be for mortgage brokers to capture incentive information at the start of the process, and then for all lenders to amend their templates to accommodate this so that incentives were already listed on the mortgage offer. This would give everyone the information they needed in an accessible format upfront (without the conveyancer having to chase around for updates) – and the process would be much faster for everyone involved. 

In the meantime, lenders could take steps to better support conveyancers by adopting a more consistent approach to communicating any changes to their section of the Handbook, as well as improving their SLAs on call answering times.

Q. Do complex chains have a significant impact on meeting that 28-day deadline? 

Unfortunately, yes. Our own internal figures indicate that around a third of New Build property transactions are connected to a chain - putting that precious 28-day deadline into the hands of other conveyancers, who are often not able (or in some cases, not willing) to work their second-hand properties around developers’ tight timescales. 

This situation is compounded by the current lack of buoyancy in the property market, as developers simply don’t have the luxury of being able to qualify out buyers caught up in complex chains – even though they aren’t conducive to meeting that 28-day deadline. 

Q. Does the ‘Help to Buy’ scheme help or hinder New Build transactions?

Help to Buy Funding has undoubtedly had a material impact on the market and has been fantastic, particularly for First Time Buyers. However, the legal process is inconsistent and complicated in practice. The process for drawdown of the funding and subsequent repayment later can be primary causes of delay in conveyancing chains and more needs to be done to simplify and tighten turnaround times.  

As the scheme was introduced in 2013, many people are now reaching the end of the 5-year interest-free period and wanting to pay off the loan by refinancing or moving up the property ladder. In chain transactions and where one party has a Help to Buy loan to repay, the process of obtaining a valuation and basing calculations on the original purchase price, coupled with the delays in turnaround times from the loan administrators, mean that there is little conveyancers can do to influence the position. Now is the time to look at the process to make it a better experience for buyers. 

Q. The developer is often involved in progressing a New Build transaction. What difference does this extra party make?

In any given property transaction, there are many parties involved in progressing the sale to completion. However, for a New Build, there are even more, as the developer typically adds their own plot progressor into the mix. 

If things aren’t going particularly smoothly, it’s also fairly common for the developer to put forward even more representatives – potentially a Sales Manager or even Director to monitor progress and help speed up the process.  

Having so many points of contact creates communication challenges, as there are simply more people in the process who not only have an influence, but also need updating on progress. Of course, this isn’t a problem for any profession to tackle alone – it’s a challenge for the industry to get this right, by embracing collaboration and the latest technology has to offer. 

There is no easy way of updating all at once without clogging up inboxes, and it is disappointing that as an industry we still do not have a central platform for updating everyone connected in the chain simultaneously.  

Q. Are homemovers their own worst enemy when it comes to meeting that 28-day deadline?  

Although they may not be aware of it, homemovers do have the potential to influence the speed of their New Build property transaction. With such a tight turnaround, every day counts – from how long it takes them to complete a form or return ID, to how quickly they can return a phone call, it all has an impact on meeting (or missing) that 28-day deadline. However the legal process can be daunting and there is a lot to read, take in and digest. People need time to do that against the backdrop of a looming deadline and lots of professionals sending information all wearing different hats.  

New Build buyers have the benefit of being signposted towards a panel law firm to assist them in their purchase and who are familiar in detail with the site in advance. However, typically buyers don’t understand the value of working with a panel firm – which includes instructing a genuine specialist in New Build transactions and process, the influential relationships that could help move things along and the economies of scale that will save them money (as panel firms can offer a discount). 

It’s not just homemovers that can influence the timescales. The speed of the transaction depends on how good everyone in the chain is at “doing their bit”. From the plot progressor to the mortgage broker and of course the conveyancer, the more everyone pulls together, the smoother the transaction will be. 

Q. Any final thoughts? 

When you stop to think about the logistical considerations involved in buying a new home; the process itself, the multiple parties involved, the regulation and risk involved and the sheer speed at which it all has to happen, it sometimes feels like a miracle that properties exchange on time! Yet many still do, thanks to the hard work and determination of the professionals connected in the chain and because when the focus is there, it is in fact entirely possible in most cases. 

Ordering searches against New Build properties is notoriously trickier (and more time-consuming) than working with second-hand homes – from having to work without a postcode point of reference, to managing endless queries from data suppliers. 

Outsourcing helps firms boost their workload capacity and win more business

Yet, spurred on by the Government’s push, more and more New Build cases are making their way to property teams across the country; forcing firms to re-evaluate how they manage their workload – without draining their limited resources. For many, including Braddon Snow Solicitors, outsourcing has been the answer. 

By managing New Build properties on a firm’s behalf, tmgroup help property departments create new efficiencies and better meet tight developer timeframes. All of which helps to boost their workload capacity, as well as their reputation, so they can win more New Build work in their area.

Managed Services take the hassle out of New Build search ordering

tmgroup are working at the forefront of delivering an efficient approach to managing New Build properties – with solutions including their ‘Managed Development’ service, which makes it easier for property teams to manage multiple plots on the same development site.

This service is tailored to firms named as the “appointed conveyancer” on a development, as tmgroup hold all relevant information about the development, enabling firms to issue a quick and simple instruction as and when the next plot is in progress. All the firm has to do then is wait for the results to come back and pass them onto their client; giving them more capacity to take on additional cases.

Jane Blackett, New Homes Conveyancing Team Leader at Braddon Snow Solicitors comments:

“We’ve been using tmgroup’s service for a number of years but found we needed a different approach for New Build given the number of plots we act on.  tmgroup worked with us on what we needed and now, for just over a year, we have worked with a bespoke system that we find much easier – especially when managing multiple plots on the same development. Once the site is set up confirming how many plots we expect to act on, all we have to do is fill in an order form and send across the plot plan. We then just ping an email over with the plot number as and when we want searches ordered against the individual plots. It’s just a much more effective use of our time.”

Firms using the ‘Managed Development’ service also benefit from agreeing search bundle costs in advance (making it easier to advise their clients), query and supplier management to minimise turnaround times, as well as Management Information (MI) reporting to make it easier for them to keep track of long-term development projects.

tmgroup work as an extension of the in-house team to get the job done quickly

Working as an extension of the in-house property department, the tmgroup team deliver against conveyancing search requirements from initial instruction through to returned results – using bespoke processes and systems to project manage. All the while giving firms the peace of mind of working with a knowledgeable team, with over 10 years’ experience in managing portfolios.

As Jane continues: 

“The Managed Services team are brilliant! Any queries, we just give them a call. If something has come up and we’re desperate to exchange, they’ll always make that extra call to chase the search – and 9 times out of 10 they’re successful too! They’re always on hand and we can’t fault the service.”

Outsourcing isn’t just for large-scale development projects – it can also help firms better manage one-off New Build transactions

Challenges around New Build don’t just slow down portfolio projects, they can also hinder the productivity of teams handling individual plots. That’s why tmgroup have extended their Managed Service to support these cases too. 

As and when the service is required, property teams can simply log into the tmconvey platform, add basic instructions to a dedicated form (accessible from a button on the tmconvey homepage) – and leave the tm team to take care of the rest. 

As with the ‘Managed Development’ service, the team will then create and map the property, order the required searches and liaise with data providers – all to support an efficient process right through to the returning of results.

Firms save time with fewer calls and interruptions across the working day

Fielding queries from data providers is one of the biggest headaches with managing New Build properties, but it often can’t be avoided as data providers require a certain level of information (that they don’t always get first time) in order to process the search. 

By letting the tmgroup team take care of any queries, firms benefit from fewer calls and interruptions across the working day. Why does it make such a difference? Drawing on years of experience, the team liaise with data providers and developers, as well as fill in any gaps in information – utilising their industry knowledge and relationships to help the transaction progress smoothly for all parties.

Want to find out more? 

tmgroup don’t operate on a one size fits all approach. We can develop processes within our service to help meet your needs and save you time. 

Talk to your Account Manager today, or get in touch with our friendly Helpdesk team on 0800 840 5571 or email helpdesk@tmgroup.co.uk