Santander report: Britain's outdated home‑buying process costs movers £560m a year and dents the economy

A report commissioned by Santander and produced with consultancy WPI Economics says Britain’s home‑buying and selling process is antiquated and is costing movers an estimated £560 million a year in direct losses, while the wider economic and consumer hit runs to roughly £1.5 billion annually.

The study estimates more than 530,000 housing transactions in England and Wales fall through each year, undermining buyer confidence and weighing on productivity. Santander said 23% of people surveyed had experienced a property chain collapse, and 85% of those reported a financial loss when deals failed.

Santander’s analysis put the average direct cost to a home mover at about £1,240 per failed transaction, with one in five reporting losses exceeding £2,000. The bank broke the broader economic impact into components: about £950 million in lost productivity caused by aborted transactions and time taken off work, £400 million in reduced on‑the‑job productivity tied to stress and ill health, and £170 million in lost leisure time.

Survey findings pointed to a cluster of causes behind the failures. The most common reason was the seller accepting a higher offer from another buyer, a practice known as gazumping, which accounted for 25.5% of collapsed deals. Protracted transaction timeframes led to 19.3% of failures as buyers were forced to withdraw or seek alternatives. Other cited causes included survey problems (16.3%) and sellers withdrawing without explanation (15.7%).

Buyers said the process was frequently slow and stressful. Some 47% described finding the right property as difficult, and 38% ran into problems with the conveyancing and legal stages. Expectations of how long a purchase would take proved optimistic: half of respondents expected the process to take less than three months, but only 41% experienced that timescale. While 9% expected it to take more than six months, 17% found themselves involved in transactions that long.

David Morris, head of homes at Santander, said the system was operating "in the confines of a framework that was established a century ago," and called for reforms to restore confidence and reduce the financial and emotional strain on buyers and sellers.

The report also documented the emotional and health costs associated with failed moves. Overall, 54% of homebuyers said they felt constantly or frequently stressed during the transaction. Among those whose transactions failed, 64% reported higher stress than normal, 57% reported increased anxiety, 49% said their sleep was disrupted and 26% said relationships were strained. Santander said these effects discourage people from moving: 28% of respondents said they were less likely to move again because of the stress experienced, while 88% said a streamlined system would incentivise them to move again.

Industry bodies and lenders quoted in the report urged digitisation and better data sharing as part of any reform. John Baguley, mortgage policy expert at UK Finance, said much property data exists but is not joined up or digitised, leaving buyers to make major decisions without full information. He argued that key information should be available earlier in the process so buyers can make better informed offers.

Kate Davies of the Intermediary Mortgage Lenders Association said lenders often see transactions fail after applicants have been fully assessed and approved, wasting time and resources. "We see cases where buyers are perfectly creditworthy, the funding is in place, but the transaction collapses because of avoidable problems further down the chain," she said.

Santander and WPI recommend a package of changes including measures to disincentivise gazumping and gazundering, greater digitisation of records and processes, and the creation of a government‑owned centralised property data system intended to reduce delays and uncertainty.

The report’s findings add weight to a growing debate among policymakers and industry groups over how to modernise the UK housing market. As housing supply remains constrained and transactions become more complex, industry participants say reforms that reduce fall‑through rates could free up stock, improve consumer outcomes and lessen the drag on economic activity.

Mortgage advisers and trade bodies also stressed practical steps for consumers amid the current system. They urged buyers and those needing to remortgage to engage early with brokers and lenders to secure conditional offers and to be aware of timing and cost risks if deals collapse. Lenders and brokers continue to advocate for systemic reform to reduce the frequency of abandoned transactions and their economic consequences.