The UK’s outdated homebuying process is draining at least £1.5 billion annually from consumers and the wider economy, according to new research commissioned by Santander.
The report, Fixing the Broken Chain, produced with WPI Economics and JL Partners, estimates that collapsed property transactions alone cost buyers £560 million each year, while a further £950 million is lost through reduced productivity, wasted time and lower wellbeing. The figure is around 40% higher than government estimates published earlier this year.
TRANSACTION FALL THROUGHS
More than half a million transactions fall through in England and Wales each year, the study found.
Nearly a quarter of consumers have experienced a chain failure, with the average direct cost of an abandoned purchase standing at £1,240.
One in five buyers lose more than £2,000 in unrecoverable costs such as mortgage fees, surveys and legal expenses.
The research highlights broader consequences for the economy, including reduced workforce mobility and limited availability of larger homes for growing families.
Almost a quarter of homeowners said they had considered abandoning a move altogether because of the stress and complexity, while 28% reported they were less likely to move again in the future.
EXHAUSTING PROCESS
David Morris, head of homes at Santander UK, said: “Buying a home should be a moment of excitement and hope, but for too many people it’s an uncertain and exhausting process.
“The homebuying journey is still operating in the confines of a framework that was established a century ago. This antiquated system is an increasingly heavy anchor weighing on the economy and fixing it must be key.”
The lender is urging ministers to accelerate digitisation across the housing sector, create a government-owned central property data system, mandate more upfront information disclosure and curb practices such as gazumping and gazundering.
The report also recommends greater data-sharing, the use of artificial intelligence to speed up transactions and a long-term strategy to improve market liquidity.
The findings come as policymakers weigh reforms to improve efficiency and certainty in the housing market, which underpins household wealth and remains a cornerstone of economic activity.
SOBERING REALITY CHECK
Joe Pepper, UK CEO at PEXA, said: “We have a government that is putting the housing market at the centre of its economic growth plans, and steps are being made to address some of the pain points at the front end, but these figures from Santander are a sobering reality check.
“The fact that over half a million transactions fall through every single year at a cost of £950M is proof that we really do need to solve the issue at its core – something that simply building more stock cannot do on its own.”
“We need to find a way to put more certainty and security into the process.”
And he added: “When transactions cause more stress to borrowers than deemed worth it and they start to give up, as this research shows, we need to find a way to put more certainty and security into the process.
“The reality is the back-end infrastructure lets conveyancers down, causing over half a million transactions to fall through. We need greater digitisation to facilitate more seamless transactions. That means industry wide standards for data to flow between all parties to increase security and reduce fraud risk, and urgent reform of the way settlement and lodgement happens.
“As it stands, this can take weeks with all parties left vulnerable, but automation of this process could mean that a title is lodged almost instantly when the funds are released.
“We need strong investment in technology that innovates the UK property market, not only for the sake of everyone’s sanity, but also to help the market realise its economic potential.”
