A recent report from the Landmark Information Group sheds light on property transactions- delving into key data points, the report reveals trends and challenges faced by the industry.
The average time from instruction to completion has surged from 75 days in 2007 to 133 days in 2022, showcasing a staggering 64% increase over the past 15 years. The duration saw a modest decrease of 7% from 2022 to 2023, indicating a subtle shift in the recent market dynamics.
Examining the period from instruction to exchange, the numbers reveal a 74% increase since 2007, with a noteworthy 25% jump observed from 2019 to 2023. The intricacies of property transactions, from search requests to mortgage offers, are under scrutiny, exposing trends that demand attention.
Despite a 26% increase in approvals post-lockdown (July 2020–December 2021), transaction times persisted, leading to a peak in average post-lockdown valuation turnaround times in July 2022. However, a subsequent 45% drop since then signifies a market correction. Notably, turnaround times in February 2023 dipped below pre-COVID levels.
The report identifies a pivotal issue lying within the information-gathering process. Delaying information acquisition until a buyer’s offer is accepted contributes to prolonged transaction times. What’s more, the report emphasises that capacity is not the primary challenge. Instead, it calls for a shift in behaviour across the industry, advocating for instructing the seller’s lawyer at the listing stage. The onus falls on selling agents, armed with the potential to alter consumer behaviour by encouraging early instruction.
The push towards upfront information gathering has gained momentum, with a call for support and fundamental changes that don’t necessitate a drastic technological leap. The focus is on fostering conversation and relationship-building, recognising that tangible benefits emerge from embracing change rather than enforcing a wholly digital solution.
As 2023 unfolds, the report notes a decline in mortgage approvals, reaching the lowest point in over a decade. The introduction of material information requirements at the end of 2023 presents an opportunity for estate agents and conveyancers to capitalise on upfront information process changes. Simon Brown, CEO Landmark Information Group, said:
“One thing is for certain, the low volume of transactions in 2023 can’t be blamed on a lack of capacity. Apart from property listing volumes, Landmark data showed all other transaction milestones – such as SSTC and completion levels – dropped by at least 30% compared to ‘normal’ levels last seen in 2019. Furthermore, despite the lowest mortgage approval volumes in a decade, transaction times for purchases only decreased by 10 days vs 2022, from 133 days to 123 days. On the sales side, the process was extended by a further 15 days vs 2022, from 144 days to 159 days. If we compare this with consumer expectations, with most home movers stating that an 8-week offer-to completion timeframe would be ideal, then the gap between expectation and reality is stark.
However, our industry experts see reason for hope as our data also identifies where the inefficiencies in the home buying process sit. So, where can we make improvements? Our data for 2023 found that conveyancing queries took an average of 60 days, a 7% increase from 2022 – despite the much lower volumes. This is a 50% rise from 2019 and an astonishing 131% increase compared to 2007. The good news is that the length of the enquiry cycle could be a thing of the past due to the changes to material information requirements, which will ensure that all properties enter the market with questions comprehensively answered at point of listing.
Home movers should now have all the information they need before making an offer, which in turn should alleviate queries, as well as the likelihood of chains collapsing due to frustration or a change of mind. But for this change to be most effective, we need to pull together as an industry to create a coherent ecosystem. By sharing, communicating and working collaboratively, we build trust, and with that, we facilitate the timely distribution of the right information at the onset of the home-buying process. Positive change may present some hurdles, but the result can yield significant rewards.”