New market insight has revealed that 93% of UK home sellers crave more transaction security to prevent fall-throughs, while a huge majority believe the government is putting too much focus on cost saving housing initiatives rather than addressing real core problems with the selling process.
Home Sale Pack has surveyed 1,039 UK home sellers to gauge their opinion on the current government’s plans and policies surrounding the housing market, specifically the efforts being made to make buying a home easier and more accessible.
Much of the government’s current and proposed housing policy focuses largely on the plight of first-time buyers, from the reintroduction of Help to Buy to the scrapping of stamp duty for those buying their first home.
When Home Sale Pack asked current sellers whether they think the government is giving too much focus to first-time buyers at the expense of all other buying demographics, opinion was split down the middle. 49% of sellers say ‘yes’, too much attention is being given to first timers, while 51% think the balance is right.
However, sellers are in broader agreement when asked about the government’s focus on cost saving policies. While 17% think it’s good to focus mainly on cost cutting exercises such as stamp duty holidays, 83% think more efforts should focus on actually addressing the wider issues that currently impact the UK housing market.
For example, 93% believe there needs to be more security and certainty during the transaction process to prevent sales from falling through after an offer has been accepted.
What’s more, Home Sale Pack asked sellers what they would most like the next government to focus on when it comes to housing policy.
Most sellers (30%) responded by saying they want to see more security and certainty given to the transaction process, particularly from the point that an offer has been accepted.
29% want to see more new-homes delivered to the market, and 25% want more focus on speeding up the transaction process. Meanwhile, just 16% want to see an increase in the number of cost-saving incentives for those who are buying a property. Ruth Beeton, Co-Founder of Home Sale Pack, said:
“This government, and many that have come before it, don’t seem to have any real understanding of what people want when it comes to housing policy. There is, of course, a need for more stock in order for more people to be able to find a suitable home of their own, but this does nothing to address the crippling inefficiencies within the buying and selling process that are causing frustration and financial jeopardy for so many buyers and sellers alike.
If more efforts were made to improve the transaction process, speeding it up and reducing the unacceptable level of risk that people currently have to accept on the market, it would make homebuying far more attractive and affordable.
Doing this would also contribute towards making the market more accessible for first-time buyers because it would mean more existing owners are willing to engage with the selling process. This would increase the number of people who want to upgrade from, for example, their first home to a larger family home, thus freeing up affordable first-home stock for those wanting to make their first purchase.”
One Response
Having moved from South Africa (a 3rd world country) to the UK (a 1st world country), I am appalled at the laws regarding sales and purchasing of properties in the UK. I personally believe that the UK are decades behind the rest of the world in the Real Estate/Estate Agency Sector.
The points below highlight some of the common frustrations with the UK’s current system. The UK property market’s complexities and vulnerabilities often lead to considerable stress for all involved parties, buyers, sellers and agents.
Here are some key points and suggestions that would illustrate these issues and possible improvements:
1. Fall-Through Rates and Reasons
• UK Context: In England and Wales, the property transaction system allows either party to withdraw from the sale until contracts are exchanged. This flexibility, while offering protection in some scenarios, results in a high rate of fall-throughs—estimates suggest about 40% of property sales fall through each year, often due to issues like chain breakdowns, gazumping (where a higher offer is accepted after a lower offer has been agreed upon), or personal circumstances changing.
• South Africa Context: Once a mortgage is granted and an Offer To Purchase is signed in South Africa, it is binding, with few reasons not to proceed, without penalties. This certainty is beneficial for all parties and reduces the psychological and financial stress associated with a sale.
2. Conditionality and Commitment
• UK: Buyers in the UK often make offers “subject to contract,” meaning there is no binding agreement until contracts are exchanged. The process is protracted and uncertain, drawn out, and surveys or mortgage approvals can reveal issues late in the process, leading to fall-throughs.
• South Africa: Transactions usually have clear, predefined conditions, and once these are met, the deal is considered binding. This upfront clarity and commitment streamlines the process and reduce the chances of ANY withdrawals.
3. Role of Solicitors and Estate Agents
• UK: Solicitors in the UK play a critical role in the conveyancing process, but the delegation of many transaction details to them can slow down the process by weeks or months. Estate agents often have limited control over the progression of a sale once an offer is accepted.
• South Africa: Estate agents in South Africa often have a more central role in managing the transaction process, including handling key documentation and ensuring that all conditions are met promptly, contributing to a more integrated and efficient process, and in essence more sales.
4. Structural Differences in Law
• UK: In England and Wales, the legal framework allows for considerable flexibility but lacks protections against abrupt withdrawal at any time. The Scottish system is somewhat more rigid and protective, with offers often being legally binding upon acceptance, reducing the risk of fall-throughs.
• South Africa: The legal system supports a more definitive and binding approach to property transactions, providing greater certainty and stability once a buyer’s offer is accepted and financing is approved. (Generally within 7 days).
5. Suggestions for Improvement
• Adopt Elements from the Scottish / South African System: The rest of the UK could benefit from adopting elements of the Scottish / South African property system, such as making offers binding earlier in the process, with a legal Offer To Purchases being signed and presented.
6. International Comparisons and Adaptation
• Global Best Practices: Many countries have more streamlined processes that could be adapted in the UK.
• UK Adaptation: Adopting practices from these systems could provide greater transaction security and reduce the high stress placed on sellers, buyers and estate agents alike, and fall-through rates would in time disappear in the UK and become more efficient and legally binding.
In closing, a property purchase is most likely the highest financial commitment a person enters into, should this not get the highest amount of clarity and peace of mind. UK, there is a lot to learn from the rest of the world.
My experience from South Africa suggests a more robust and reliable transaction system that could offer valuable lessons for the UK. Implementing reforms that enhance certainty and reduce fall-through rates which would improve the overall stability and satisfaction within the UK property market..