Government departments are working as part of a coalition designed to transform the archaic homebuying and selling process, which costs the economy nearly £1bn a year.
The coalition, which includes the Centre for Finance, Innovation and Technology (CFIT), will explore how a digital platform could improve things.
“Collapsed chains, spiralling fees and gazumping could all become things of the past,” said CFIT.
Supported by the Smart Data team at the Department for Business and Trade (DBT), the coalition is tasked with producing a roadmap for delivering a smart data service for the homebuying sector and potentially creating a prototype smart data system.
There is currently a severe lack of digitisation in property sales processes. The Open Property Data Association (OPDA) estimates that less than 1% of the data required to buy a home is available in digital format.
According to CFIT, such facts contribute to property sales taking 22 weeks on average to complete, and 30% of them falling through, costing consumers over half a billion pounds a year.
And it is not just the buyers and sellers of property who are out of pocket. “Not only are these inefficiencies causing stress and frustration for homeowners, but they’re also costing the economy £950m a year, stifling economic growth,” said CFIT.
The DBT, the Land Registry and the Ministry for Housing, Communities and Local Government are part of the coalition looking at the pros and cons of applying Proptech, which makes property-related processes more efficient and streamlined using digital technology.
The organisations will consider a system that could provide a “reliable estimated completion timeline for buyers and sellers, with real-time progress updates”.
It also wants to end gazumping, where someone makes a higher offer for a house than an already accepted offer, and gazundering, when a buyer lowers an offer already made, often just before the exchange of contracts.
It hopes to lower legal fees with increased efficiency and competition in the conveyancing market.
The system could use a unique digital identifier of every property, with up-to-date details about it as well as buyer profiles to speed up mortgage approvals.
Projected growth
According to Fortune Business Insights, the global property technology (proptech) market, which includes developments such as the one being proposed to streamline UK home sales, is projected to grow from a value of $40.19bn this year to £88.37bn by 2032.
Leon Ifayemi, director of coalitions and research at CFIT, said this is the centre’s first cross-sector coalition, spanning financial services and property.
“It’s also the exact kind of thorny, interdependent problem that we exist to solve,” he added. “Work is already underway to digitise elements of the process. But if we are going to successfully use technology to solve these pain points, we need policymakers, regulators and industry all to be pulling in the same direction.”
Digital economy minister Liz Lloyd said: “Using smart data has the potential to make this quicker, more secure and more transparent for consumers when they are making the biggest, most important purchases of their lives.”