Increasing consumer power
The average person only moves house once every 19 years, which means that customers are not familiar with the market, the buying and selling process, or the range of businesses and services on offer. This lack of experience and information results in many people choosing the lowest-priced option by default rather than the one that best suits their needs.
The Department for Business and Trade (DBT) believes that better-informed consumers will be more empowered and increasingly competition will be based on service as well as price. Educating consumers about the role and performance of professionals in the sector will enable them to make better decisions about which are right for them and how to hold them to account.
Digitising the system
The sector remains overwhelmingly paper-based (with the average transaction generating 130 documents) and with very little automation in place. The current data in the sector is fragmented and difficult to access, leading to a time-consuming process.
Improving the availability and standard of data will also reduce fall-throughs which happen due to information coming to light after an offer has been made. Fall-throughs cost consumers £260 million per year. Within the industry, estate agents and conveyancers alone lose £1 billion, and around 4 million working days each year.
The DBT states its intention to work with stakeholders to make key information available to consumers upfront and in a digital format, enabling them to make more informed decisions about whether to make an offer on a property.
Identifying opportunities
The UK Government plans to explore the use of Smart Data powers in the home buying sector through the Data Protection and Digital Information Bill (currently in its Report Stage in the House of Lords) and will launch pilot projects to inform future digitalization of the process.
In the 2023 Autumn Statement, £3 million of funding was allocated to run pilot projects in home buying and selling which will inform the development of a future Smart Data scheme. DLUHC is expected to announce details of the projects in Q2 2024.
