Struggling home buying process negatively impacting the economy, claims Santander
In a bold move, high street bank Santander has urged the government to modernise the property market, citing a broken home buying process that is costing the economy at least £1.5 billion annually.
According to a report by Santander, the cumbersome buying process has dampened Brits' appetite to move home, adding friction to the labor market, slowing economic growth, and preventing first-time buyers from getting onto the property ladder.
The report highlights that approximately 85% of people who experienced a failed transaction reported a financial loss, with the average cost at £1,240. One in five reported a loss in excess of £2,000, and just under 45% of failed sales happened at or beyond the three-month mark.
Santander proposes several reforms to streamline the process, including introducing a centralised property data system and expanding the use of AI to create a 'seamless journey' in the property market. The bank also suggests providing buyers with all necessary information at the start of the process, automating administration tasks to remove the burden from conveyance and lenders, and ending the use of short-term solutions, such as stamp duty holidays, to boost market activity.
Morris, the chief executive of Santander UK, expressed that the scale of the challenge in the property market remains largely underappreciated. He called for powerful reforms to give buyers and sellers more confidence, easing the financial and emotional strain, and creating a housing system fit for today's consumers and economy.
The broken home buying process has also impacted the wider economy, costing £950m annually due to the nearly 60% of the time spent on a failed transaction being taken during regular work hours, leading to a loss in economic productivity.
Santander's call for modernisation comes as the government pledges to build 1.5 million homes over its first five years in power, but the report from Santander states that the outdated home buying process is a significant barrier to achieving this goal.
Morris concluded by emphasising the need for reforms to speed up the process of buying and selling real estate within 28 days, as part of a broader effort to reform the system and create a more efficient and consumer-friendly housing market.
