The Centre for Finance, Innovation and Technology (CFIT) has today announced a key step forward in the government’s plans to revolutionise the homebuying process through the launch of an industry-wide Coalition that will coordinate and progress the various live initiatives seeking to enable a digitally-driven property market.
Backed by the Department for Business and Trade (DBT), the Open Property Coalition will convene a range of public and private-sector organisations including the Ministry for Housing, Communities and Local Government (MHCLG), HM Land Registry, the Open Property Data Association (OPDA), real estate companies, financial institutions, regulators, conveyancers and proptechs.
Its work will build on existing research, industry pilots and stakeholder initiatives and explore how emerging technologies like Digital ID, tokenisation and trust frameworks could help reimagine the process in the future. Outputs will include a roadmap for delivering a fully-fledged smart data scheme for the homebuying sector and potentially a prototype smart data solution.
The average property transaction currently takes 22 weeks to complete and 30% of transactions fall through. This is often a consequence of siloed data, inconsistent standards and opaque analogue practices, which complicate each stage of the transaction. The OPDA estimates that less than 1% of the data required to buy a home is available in digital format. That means delays, duplication, errors and fraud can easily occur every time information is shared between estate agents, mortgage brokers, lenders, surveyors and conveyancers.
These inefficiencies cause unnecessary worry for millions of Britons, with 530,000 housing transactions falling through in England and Wales every year costing the economy £950 million; inefficient allocation of the UK’s housing stock, as homeowners are deterred from up- or downsizing; higher fees for buyers and sellers, including on transactions that fall through (which alone cost consumers £560 million annually); and FCA data showing a fast-rising rate of mortgage and conveyancing fraud.
In developing a proof of concept that shows how secure data-sharing across the property ecosystem could work, the Coalition will explore the potential features and impacts of a new Open Property tech solution. These could include:
• A reliable estimated completion timeline for buyers and sellers, with real-time progress updates,
• An end to gazumping and gazundering through a quicker, fairer and more transparent process,
• Lower legal fees, thanks to a more competitive, efficient conveyancing market,
• A unique digital identifier of every property and an up-to-date record of its attributes,
• Improved mortgage underwriting, informed by the risk profile of the property as well as the buyer,
• Faster proof of source of funds – and an end to the ‘mortgage in principle’,
• Faster and more secure disbursement of funds.
Leon Ifayemi, director of coalitions and research at CFIT, said: “This is CFIT’s first cross-sector Coalition, spanning financial services and property – but it’s also the exact kind of thorny, interdependent problem that we exist to solve. Many of us have personally experienced how buying a home in England or Wales can be slow, opaque, costly and aggravating. Work is already underway from DBT, MHCLG, HM Land Registry and the OPDA 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 exact same direction. Tackling Open Property also means we can draw on our accumulated experience in areas like Open Finance and Digital ID.”
Digital economy minister, Liz Lloyd, commented: “Better use of smart data is integral to our future prosperity to help grow the economy. Buying a home can be time-consuming, lengthy and stressful. 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.”
Terry Robertson, deputy director of strategy at HM Land Registry, added: “Digitising the home buying and selling process will bring huge benefits to everyone involved in the property sector. This transformation depends on collaboration. This is why HM Land Registry supports the CFIT-led Open Property Coalition, as well as other initiatives like the Digital Property Market Steering Group. Both are prime examples of bringing stakeholders together to address shared challenges across the transaction journey.”
