A persistent issue in the property market is the generally slow transaction process. According to the Homeowners Alliance, almost a third of adults surveyed believed that the transaction process should be faster. What is further alarming is the reported 300,000 annual fall throughs in property transactions, which cost sellers around £400 million.
As a result, it has become widely acknowledged among industry experts that the transaction process is a major problem that needs to be addressed by the Government.
What Does the Data Reveal?
A report conducted by Landmark Information Group reveals that the average time in 2022 for property transactions, defined from the instruction to the completion of the transaction process, stood at 133 days. This is a 28% increase compared to 2019.
Furthermore, in a survey compiled by the Open Property Data Association, 57% out of the over 5,000 respondents, most of whom were second-time buyers and therefore had previous experience in the market, thought that the home buying process would take less than two months. In practice, however, 46% found out that it took anywhere from three to six months. Overall, 62% of the respondents recorded the transaction process taking over three months to complete.
Different regions also vary in terms of the length of the transaction process. The worst region in the survey was the West Midlands, as nearly 20% of respondents recorded their property transactions taking over six months to complete. In other parts of the country, respondents recorded the transaction process surpassing six months in East Anglia and the South West at 18%, while the rate in the North East stood at 19%.
Maria Harris, chair of the OPDA, provides the following commentary on these results: ‘our large-scale survey regrettably but predictably confirms what we have long asserted, that homebuying is not the customer centric experience it should be. The current process delivers an appallingly slow, unpredictable, and disappointing experience for the majority of home buyers and sellers.’
One factor causing the long transaction process is enquiries. One study found that the average time in 2007 between enquiries being raised and replied was 26 days. The current average time is 56 days. Furthermore, when zooming in on the time for enquiries to be raised, the average time in 2007 was 18 days, while in 2022 it was 35 days.
What Can Be Done?
What the data underscores is that the current system is failing to carry out the transaction process in a timely and efficient manner. On the contrary, it has often marred the flow of the market by needlessly making the transaction process arduous, which leaves buyers and sellers more vulnerable to fall throughs.
Considering that the HMRC has recorded the number of property exchanges reaching 96,330 in December 2024, up 19% compared to December 2023, the current system requires suitable changes in order to facilitate the uptick in property exchange activity.
Housing and Planning Minister Matthew Pennycook put forward a statement recognising that the current transaction system is ‘cumbersome’ and that the Government must help ‘homebuyers save money, gain time and reduce stress while also cutting the number of house sales that fall through.’
One such measure is the ongoing 12-week project undertaken by the Government to identify the most effective ways of digitalising the transaction process. Outlining the benefits that this could potentially achieve, the Government has said that ‘under a fully digitalised home buying and selling process, the information key parties need – from mortgage companies to surveyors – will be within reach immediately, with the necessary identity checks carried out once. Clear information early on will mean there are no surprises late on in the transaction which might cause it to fall through.’
Such a move has been welcomed as an acknowledgement of the deficiencies and pitfalls of the current transaction system. Johan Svanstrom, chief executive of Rightmove, argues that ‘digitising the property market is key to helping speed up the moving process. If the plans set out today can further the access to information and an improved transaction process, it’s also critical to drive industry-wide adoption of tech solutions and collaboration to make it a success.’
Given that Labour’s housing agenda is informed under the precept of acceleration, these discussed measures should address some of the major issues that typically hold up the transaction process.
What Should You Expect?
With all the information taken together, it is a useful guiding principle to be mindful that the transaction process may take longer than one might expect, much less desire. Although Labour’s proposed solutions may accelerate the process, it remains to be seen how much the Government can trim down the length of the transaction process.
As such, it is prudent to keep in mind that the transaction process may last several months. It can range anywhere from two to six months. Depending on how the transaction process unfolds, it may take even longer in some regions.
