A report from Santander which examines the ‘frozen in time’ process of buying and selling a home suggests failed transactions cost the economy ‘a conservative calculation’ of £1.5 billion each year – a combined total of direct consumer costs, lost work output, wellbeing costs and wasted leisure time.
Santander’s research, conducted in partnership with consultants WPI Economics and JL Partners, includes an economic analysis which suggests 530,000 transations fail each year. An additional survey of 2,363 consumers found 23% of those who had tried to buy a property said their sales had fallen through.
For consumers, the cost is both financial and emotional, the report suggests: the average individual direct cost of a failed transaction is £1,240, with 57% of respondents reporting increased anxiety, 49% saying their sleep was affected and 26% saying personal relationships had become strained. The report places the cost of health issues alone at £110 million annually, noting:
“For instance, 52% of recent buyers reported negative mental health impacts as a result of a housing transaction failure, with issues including anxiety and insomnia. For one in three people, these negative feelings were reported to lead to a fall in workplace productivity – with over 90,000 individuals affected each year.”
For the buyers whose transactions did proceed, more than a third (38%) of respondents said they found the conveyancing and legal process hard. Over half (55%) said it was too long, 23% said documents were too complicated and 23% said their solicitor was hard to contact.
The figures reflect ‘the pressure on the system as it currently operates, with stakeholders from conveyancers to surveyors already operating at maximum capacity, which has been exacerbated by a reduction in the number of conveyancers and firms’, the report notes.
It continues:
“In fact, there has been a 15% fall in the number of conveyancers in England and Wales between September 2021 and January 2025 according to the Law Society. Even at the end of the process, when you might expect the stress to ease and the excitement of a new home to kick in, people still found it really difficult: 38% of respondents said that exchanging and moving was hard.”
Santander UK’s head of homes David Morris said the report shows home buying ‘is often marred by delays and complications resulting in an acutely stressful and off-putting experience for consumers’. The total direct cost of failed transactions to consumers is estimated to be £560 million each year, combined with ‘an experience that some choose to never repeat again’ and locks thousands of properties out of the market, Morris claims.
More than a quarter (28%) of consumers surveyed for the report said they would be less likely to move again due to their negative experience and 24% said the complexity of the process made them consider giving up on buying a home altogether. And, while 46% of homebuyers said they were excited about the prospect of owning their home, 54% said they were constantly stressed during the process.
Joe Pepper, UK CEO at PEXA, said the research is ‘a sobering reality check’. He added:
“The fact that over half a million transactions fall through every single year at a cost of £950 million is proof that we really do need to solve the issue at its core – something that simply building more stock cannot do on its own.
“When transactions cause more stress to borrowers than deemed worth it and they start to give up, as this research shows, we need to find a way to put more certainty and security into the process. The reality is the back-end infrastructure lets conveyancers down, causing over half a million transactions to fall through.
“We need greater digitisation to facilitate more seamless transactions. That means industry wide standards for data to flow between all parties to increase security and reduce fraud risk, and urgent reform of the way settlement and lodgement happens.”
Santander agrees, noting in the report ‘there has been progress to expedite the conveyancing process through digitisation’. However, it adds there is ‘a lot more to be done’ and calls for eight ‘political asks’: expediting digitisation; better up-front information disclosure; a centralised and government-owned property data system; improved data sharing; incentivised use of AI; disincentivised gazumping and gazundering; and a long-term approach to market activity.
‘It is clear that better data, and better digitisation are key to unlocking a safer, faster and more enjoyable experience for both consumers, and the industry,’ the report notes.
“In so doing, we can stem the flow of £1.5bn in consumer and economic costs each year. But digitisation must be universal. We must facilitate a system whereby each and every stage of the journey is using technology to drive efficiency, and that this is interconnected. A uniform approach across industry is required if we are going to fix the broken chain.”
‘The housing market is volatile and this has been particularly evident in recent years, whether due to the fallout from the global financial crisis, the impact of Covid-19, or the market reaction to the 2022 Mini Budget’, Morris said.
“But in stark contrast to the dynamism and fluidity of the market, the underlying process of buying and selling a home has stayed frozen in time. Without significant attention, the outdated system risks weakening the health of the wider economy and undermining the confidence of the UK economy.
“Established in its current form over a century ago, the framework brought about through the Law of Property Act of 1925 pre-dates the World Wide Web, let alone the advent of the smart phone and the digital explosion that came with it. Put simply, someone buying their first home today will experience a process that’s almost identical to that experienced by their grandparents’ generation.
“We have the opportunity to transform home buying and selling in the UK for generations to come, creating a market that sets a global standard while delivering lasting value to both the economy and consumers. Now is the moment to seize it.”
Last week, the secretary of state for housing Matthew Pennycook acknowledged the home buying process in England in Wales is ‘slow, costly and stressful for both consumers and professionals’.
In a written response to MP Ellie Chowns, who asked if the government had considered the merits of introducing a Scottish-style system, Pennycook added:
“On 9 February 2025, the government announced action to improve the availability of property information through digitalisation. This will help transactions run more smoothly by ensuring all parties are able to access the information they need at the right time.
“We continue to review evidence from other jurisdictions, including in respect of protections such as reservation agreements, as we consider further measures to improve the home buying and selling process.”
Santander’s report, Fixing the broken chain, can be downloaded at https://dam.santander.co.uk/content/dam/publish/media-relations/santander_fixing_the_broken_chain_report.pdf
This article was updated on 21 September
2 responses
A major lender, Santander, has commissioned a report based on a deeply false and flawed narrative. The big problem with these type of narratives is that they weave together, partial truths, omissions, and outright fabrications into a coherent, but factually incorrect story.
Once upon a time it would be the Law Society that would rebut these fairy tales as soon as they appeared but the silence from Chancery Lane is deafening.
Santander seeks to advance the cause of ‘modernisation’ build on multiple misrepresentations which will cause deep anger within the legal profession bearing in mind that this is the lender which demands that Certificates of Title by FAX!
Let’s name some elephants in this room:
1. Cost – SDLT; Leasehold Management Companies (Firstport; E&M etc); the conveyancing fee does not cover the time spent. Because our fees are cheap we have to do volume or employ administrators/case handlers. Both can reduce customer experience – client care.
2. What we must do – from the complications due to SDLT (nasty tax), Building Safety Act (overly complicated), Lender’s requirements and their (irritating) panels; Estate Agents who stir the pot (intended or as by-product); on-boarding and policing money laundering; oh and dealing with the conveyancing.
3. Clients – amazingly they change their mind about buying a property. Or life’s events cause a change such as redundancies, job opportunities elsewhere, or a realisation that the cost of it all would strain their finances. In addition we have to professionally guide them in states of anxiety and paranoia (theirs and ours).
Yes the system needs to change. But not a light hand on the tiller. Something radical (so that won’t happen). And we ought to have clients protected by Title Insurance. Not defect indemnity but a blanket policy. I used to Offer clients the London & European Title Insurance Policy. Alas it is not there in the same way now.