Younger consumers, which includes first-time buyers and families with children, are disproportionately impacted by the outdated homebuying process in England and Wales, according to new research from Santander UK.
The report, Fixing the Broken Chain, based on independent economic analysis from WPI Economics and a survey of over 2,000 consumers by JL Partners, shows that there are more than half a million (530,000) failed housing transactions each year in England and Wales. The data found that younger generations are disproportionately impacted, with 36% of those aged 25-34 having experienced a failed property transaction, compared to just 23% of the overall UK population.
The research also shows that the youngest buyers are more likely to feel the deep emotional strain which comes from navigating the homebuying process, with almost two thirds (61%) of 18-24 year olds feeling constantly or frequently stressed during the transaction, compared to 54% of the wider population.
As a result, this is discouraging activity, especially amongst the next generation, as 42% of 18-24 year olds and 38% of 25-34 year olds have considered delaying or giving up buying a home.
For those who are able to face the turbulent system, there is a lack of affordable housing stock as existing homeowners have little appetite to move as a result of the complex transaction process. A third (32%) of 55-64 year olds and 36% of 64-74 year olds said they were less likely to move as a result of their previous buying and selling experiences. The result is a vicious cycle and misallocation of UK housing, with older generations unable to downsize, second steppers unable to upsize and first-time buyers being locked out altogether.
The appetite for change is prevalent among all buyer types, with over three-quarters of under-35s saying a streamlined process would encourage them to move, compared to just over half (57%) of consumers. Meanwhile, older generations are also eager for change, with nearly half (45%) of 55-74 year olds claiming a change in the system would make them more likely to move.
David Morris, Head of Homes at Santander UK, commented:
“Buying a first home or moving to accommodate a growing family should be a moment of joy, but, for too many young people, it’s become an exhausting and uncertain ordeal that puts huge pressure on their finances and family life, let alone their mental health. This absolutely should not be the case for a transaction that constitutes one of their biggest financial commitments.
We need to act to make it easier for people of all ages to buy and sell so we can get the market moving, that’s why we’re calling for a number of simple yet powerful reforms, which would give buyers and sellers more confidence, ease the financial and emotional strain and create a housing system fit for the next generation.”
Santander is calling for powerful reforms to streamline the process and give buyers and sellers more confidence, and it is calling on the Government and regulators to:
- Mandate digitisation across all stakeholders
- Disincentivise illegitimate gazumping and gazundering
- Mandate better up-front information disclosure from all parties
- Create a government owned, centralised property data system
- Improve data sharing through Open Property
- Incentivise the use of AI
- Take a long-term approach to support market activity
