Annual financial losses from failed house purchases in Britain amount to £560 million, with the home buying process deemed outdated
In the current housing market, the home buying and selling process is a source of stress and frustration for many. According to Santander, the process is disproportionately slow and stressful, with 46% of homebuyers feeling stressed throughout the transaction.
One of the key reasons for this stress is the length of the process. Santander found that the length of the process is a crucial reason why transactions fall through. In fact, around 530,000 housing transactions across England and Wales fall through every year, costing home movers £560 million annually.
The lengthy conveyancing and legal process presents difficulties for 38% of movers, while finding the right property is difficult for 47%. These challenges can lead to sleep disruption for 49% of those who experienced a failed property purchase or sale, and 57% reported increased anxiety.
Strained relationships and damaged friendships are also a common result of the stressful process. 26% of those who experienced a failed property purchase or sale experienced strained relationships, and 28% of homeowners are less likely to move again following the stress of their buying experience.
The seller accepting a higher offer from another buyer, known as gazumping, is the main reason property transactions fall through. This practice is a significant source of frustration for homebuyers and sellers alike.
Santander has suggested a number of policies to fix the broken home buying and selling process. They propose disincentivizing gazumping and gazundering, making the process far more digital, and creating a Government-owned centralized property data system. John Baguley, a mortgage policy expert at UK Finance, echoes the call for digitisation to fix the broken process.
Kate Davies, of the Intermediary Mortgage Lenders Association, adds that from a lender's perspective, the most frustrating element of today's home buying process is that so many failures occur after applicants have already been fully assessed and approved for their mortgage.
Current issues in the housing market, such as a delayed Budget, stamp duty row, gilt wobble, potential new property tax, down valuations rising, and interest rates, are compounding the problems faced by homebuyers and sellers.
The Government needs to prioritize reforming the homebuying and selling process to give buyers and sellers more confidence, according to Santander. By addressing these challenges, we can make the process less stressful and more efficient for all involved.
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