55% of consumers who purchased a home within the past five years, hit at least one problem or bottleneck in the home buying process. The most common problems encountered (by 39%) were chain-related problems, followed by seller-related problems (17%)– e.g. seller withdrew from market, asked for more money, accepted a gazumping offer - and finally property-related problems (13%) – e.g. property defects were found. Property and seller problems are sometimes closely related, so property issues like a survey revealing serious problems with the property and searches revealing serious problems are linked with the seller problem of a property being withdrawn from the market.
In order to overcome these problems, three types of changes are wanted by consumers:
- Behavioural and procedural changes – i.e. changes to the fundamental processes of home buying which may require legislative and regulatory action, e.g. making sellers collect together relevant information in order to be ‘sale ready’ before they put their homes on the market or making subject to contract offers legally binding (in England and Wales).
- Enhancements to the speed of the process – i.e. changes which should help make a sale faster, including changes that help the buyers/sellers keep track of how fast the sale is progressing, e.g. an online portal/service which you could log into to see the progress of the conveyancing process, requiring local authorities to respond to search requests within 10 working days, introducing a Property Logbook.
- Greater use of online systems (presumably to aid sales speed and make the process easier for buyers/sellers), including online buying and selling guides, e.g online comparison site comparing conveyancers, surveyors and mortgage brokers.
Some of the other findings to come from the research are:
- First Time Buyers (FTBs) tend to face fewer purchasing problems compared with consumers who are buying and selling homes at the same time (Transfer Buyers), reflecting fewer chain problems encountered by FTBs.
- But FTBs encounter more seller and property problems compared with Transfer Buyers, possibly because they are more likely to be buying cheaper homes in more affordable areas which may not have been well maintained in the past.
- Transfer Buyers (especially consumers who are up or downsizing) want more changes to the home buying process than FTBs do.
- Consumers tend to adopt one of five purchasing strategies to buying their homes, including the Married couple, no savings or home approach (16% of home buyers), e.g. mainly married couple FTBs who rely heavily on their affluent relatives to generate their deposits. These have grown in importance as home buyers recently.
This looks at the home buying process, focusing primarily on how the process could be improved from the point of view of the home buyer. This report considers who recent home buyers are, how consumers approach and navigate the home buying process, what bottlenecks are encountered along the process and how these bottlenecks can be eased or ended. It also shows data on the number of residential property transactions in recent years.
For this report, the publisher commissioned research from MIS Group’s UK panel. The research was structured so that 2,051 consumers aged 18+ were asked about their recent home buying actions. This generated 812 individuals who had purchased their current main home in the past five years.
1. EXECUTIVE SUMMARY
- Over 1 million home sales each year
- Three types of home buyer but five purchasing strategies
- Young, working individuals are the bedrock of FTBs…
- And they are of growing importance as home buyers
- One-third of recent buyers set to return to the market
- And when they return, they will haggle on price
- Virtually all buy with legal support and most get a survey
- On average it takes four months to complete the purchase of a home
- Over half hit problems and delays when they buy
- TBs are hit by chain problems and FTBs by seller and property problems
- Three types of remedy
- TBs and RBs want more changes than FTBs do
- Three fundamental reforms required
3. PROFILE OF THE HOME BUYER
- First-Time vs Multiple-Time Buyers
- FTBs are more likely to be from the C1 and C2 social grades
- FTBs more London-centric compared with TB and RBs
- Younger, affluent FTBs have become more important as recent home buyers
- One-third of recent home buyers plan to come back into the market
4. HOW CONSUMERS APPROACH BUYING A HOME
- Mortgages and savings, crucial for recent home purchasing
- The five purchasing strategies
- FTB married couples with no savings or home grow in importance
- Four-in-ten buy below the asking price
- Over nine-in-ten recent buyers get legal help
- Over four-in-ten buyers use a recommended legal professional
- Over eight-in-ten home buyers get a survey
5. BOTTLENECKS IN THE HOME BUYING PROCESS
- Almost four-in-ten home buyers found the process took longer than expected
- Over half of buyers encountered problems
- Transfer Buyers the most likely to face problems
6. MEASURES TO EASE THE BOTTLENECKS
- Sales changes the most desired
- Three classes of change
7. MARKET SIZE AND TRENDS
- Over 1 million home sales in 2019
- England dominates sales but is losing share
List of Figures
Figure 1 The composition of the recent home buyer sample
Figure 2 The profile of recent home buyers by gender, age, social grade and income
Figure 3 The profile of recent home buyers by region
Figure 4 The profile of recent home buyers by time of last home purchase
Figure 5 The percentage of recent home buyers very likely to buy another home in the next three years
Figure 6 How the last home was financed and how the deposit was generated
Figure 7 The Five home buying strategies
Figure 8 The change in buying strategies over the past five years
Figure 9 The asking price paid by recent home buyers
Figure 10 The use of legal service providers by recent buyer characteristics
Figure 11 The use of recommended legal services providers
Figure 12 The types of surveys and certificates used when purchasing a home
Figure 13 The time it took to complete a home purchase by expectations
Figure 14 The problems encountered when buying a home
Figure 15 Home buying problems encountered by type of buyer
Figure 16 The changes to home buying wanted by recent home buyers
Figure 17 The three prime changes home buyers want to see by % of home buyers wanting
Figure 18 The trends in volume home sales*, 2010-2019
Figure 19 The trends in volume home sales by region*, 2010-2019