Buying a house in this country can be ridiculously slow, as a handful of recent studies have highlighted. Research from the House Buyer Bureau looked into the time different Local Authorities are taking to turnaround property searches for transactions, and the findings were horrifying.
Bracknell Forest Council, for example, is currently averaging a painful 92 working days, the result of IT issues. Camden and Merton councils in London, and Rochdale Council, are all turning searches around in an average of 52 working days, while Tonbridge & Malling Council were found to take an average of 47 working days.
This was echoed by research from Connells Group, which found the average time to exchange contracts grew to 104 days in April, the first April on record in which it had stretched beyond 100 days, with one in five homes (17%) actually taking more than six months to exchange after going under offer.
We all know that buying a home is one of the most stressful experiences any of us can go through, and little wonder given these ridiculous timeframes. As an industry, we must not only recognise that this is unacceptable, but make it our mission to dramatically improve the time taken to complete a deal.
THE DANGER OF COLLAPSING DEALS
The truth is that when the housebuying process is this slow, this protracted, there are significant knock-on effects.
The obvious victims are the buyers and vendors themselves. There’s the stress that comes from uncertainty, which brokers will know can result in frenzied calls and emails at all hours. But there’s also the threat of deals collapsing, as the parties become nervous about a perceived lack of progress.
A substantial number of deals collapse even after a sale is agreed, with the latest data from TwentyEA showing that in the first quarter of this year almost 24% of sales fell through.
There is a financial cost to consider, not just for the clients but for brokers too. If the deal limps along and finally crosses the line after three months, then at least the broker gets paid. But if the delays lead to the case collapsing, then the broker ends up with little to show for all that work, and all those long hours.
FINDING A BETTER WAY
This is clearly an unacceptable way of operating. And across the industry, we need to not only consider how we can improve our own speeds, but how we can champion similar improvements across the other parts of the process.
The smarter use of technology has the potential to be transformative when it comes to speed. It’s something we have focused on at Atom bank, working with brokers to pinpoint how the process can be streamlined, and where technology can be most impactful, for example through the greater use of automation on valuations and income verification.
It has meant that 30% of our Prime and Near Prime offers in June were issued within one working day. That sort of turnaround puts borrowers and brokers in a more informed position far more quickly, allowing them to move forwards with confidence.
AI will surely play a bigger role too in the months and years ahead, as brokers and lenders develop new ways of incorporating it into their processes. As always, it’s not about replacing the human element but supplementing it, helping us to reach the same conclusions but far more quickly.
However, as we have seen with the property search timeframes, it’s not just a question of getting a mortgage in place that causes the prolonged purchase process. If technology is incorporated sensibly throughout, then there’s no question we can deliver a much smoother, faster experience.
A Land Registry pilot with seven local councils only recently finished, which involved the use of digitised records of building regulations and highways schemes, two areas the agency said tend to lead to the longest delays. Alongside this, a phased migration of local land charge searches from local authorities to the Land Registry is taking place, again aimed at providing a faster service.
We also have organisations like the Open Property Data Association (OPDA), who are pushing forward innovation around the safe sharing of data upfront which can speed up the way property transactions are handled.
Our chief commercial officer, Chris Storey, is on the executive committee of the OPDA, so we have seen first-hand how impactful that innovation can be, and the potential for a future where buyers and sellers are not left tearing their hair out over deals which take months on end.
The previous administration published planned reforms aimed at cutting buying times by around four weeks, but with a new Prime Minister and Housing Secretary in place we need confirmation that these proposals will not fall through the cracks.
A faster homebuying process would deliver material benefits for everyone involved, but it will only happen if, as an industry, we show that we are restless for change and don’t allow complacency to set in.
