The commercial case for greater industry collaboration – Vaughan
Sometimes, it takes a set of financial results to put a familiar industry problem into a rather different context.
Recent results from some of the leading players across the property market have highlighted the pressure being felt across the sector, with profitability affected by a combination of subdued transaction volumes, higher costs and challenging housing market conditions.
Those pressures have a number of causes, but alongside them sits another familiar issue: the time it takes to get property transactions from an agreed sale to exchange and completion. That should matter to all of us, because it turns a long-running debate about transaction times into a commercial one.
This is certainly not about blaming conveyancers. Property transactions depend on lenders, brokers, estate agents, conveyancing firms, search providers, valuers and numerous other parties completing different tasks at different stages. Many of the factors affecting progress sit outside the control of any one profession.
What these results help illustrate is just how closely the fortunes of those different businesses are tied to the same transaction.
An estate agent may agree a sale, but its fee is generally dependent on completion. A broker can arrange the mortgage, but the case remains in the pipeline, alongside the procuration fee, until completion. Lenders have costs of raising and holding funds they expect to advance, while conveyancing firms carry the operational cost of managing cases for longer when progress across the wider chain slows.
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Slow transactions are therefore not somebody else’s problem; their commercial effects spread throughout the housing and mortgage market.
The gaps between us matter
There has already been considerable investment in making individual parts of the home buying process more efficient. Lenders have made major advances in mortgage technology, while conveyancing firms, brokers and estate agents have also invested heavily in digital tools and improved working practices.
As I touched on earlier, the challenge is that a property transaction does not take place within any single organisation. Improving internal processes is important, but there is a limit to what that can achieve when so much depends on how effectively different organisations interact.
That puts greater focus on the points between them. Can information pass from one party to another without unnecessary duplication? Can questions be raised and resolved efficiently? Can information already gathered be reused where appropriate? And can the technology used by one business connect effectively with systems elsewhere in the transaction?
These are shared process questions, not questions about whether one profession is working hard enough.
Removing unnecessary administration and creating better visibility across the processes should also allow those involved to spend more time on work that genuinely requires their expertise, rather than repeatedly servicing the mechanics of the process.
A common commercial interest
This is where the commercial argument for greater industry collaboration becomes increasingly difficult to ignore.
When transactions take longer, costs may appear in different places, but they stem from the same transaction. That commercial pressure should encourage all links in the property market to think differently about how we improve the home buying process. It cannot simply be about each sector making its own part faster while maintaining the same boundaries between organisations.
This is where technology has an important role, although the answer is not simply adding more systems. Greater progress is likely to come from connecting the technology already being used, improving how trusted information moves between parties and creating more consistent digital workflows across organisational boundaries.
There will never be a single answer to every delay in a property transaction, nor should responsibility for fixing them sit with any one profession. But when slower transactions mean delayed income, higher costs, less certainty and greater fall-through risk across the market, improving the process becomes a shared commercial priority. Meaning that the case for working together is no longer simply about delivering a better home buying experience; increasingly, it’s about better business too.
