A lot has changed since the Victorian era; we have the internet, international flight routes, and smart phones which contain almost every detail of our lives.
Yet when it comes to buying a house, there’s one part of the process that would still be recognised by the Victorians.
While most parts of the home buying and selling process have been digitalised, the settlement process still relies on the transportation of physical documents between offices; a step which causes delays, friction and confusion to many purchasing a home.
The COVID-19 pandemic has underlined the impact that this has on home-buyers and the lack of resilience in the system, with The Times reporting that the average transaction time from point of sale to completion increased from 12 weeks to 16-18 weeks in September 2020.
With offices closed across the country, that seemingly simple step has faced reduced capacity and operational challenges which have stopped many from progressing their home buying journey.
A simple change – digitisation – would remove these barriers and open the door to a smoother property settlement system. And, as the UK Government aims to place the housing market at the centre of the economic recovery, it must look globally for the best way to do so.
Australia is the first country in the world to implement a fully digitised property settlement process, with Property Exchange Australia (PEXA) at the forefront of this. Over the last decade it has helped complete 7.2 million property transactions and replaced the paper-based conveyancing process with a simple online exchange platform.
This new system has benefited many; it’s reduced costs for consumers, minimised the risk of errors and delays, and given consumers direct access and visibility to the progress of their home buying process.
For the conveyancing and legal industry, it’s reduced the need to correct manual errors, allowing conveyancers to concentrate on higher value work and decreasing concerns around fraud.
Crucially, PEXA’s platform has reduced friction in the Australian housing market, leading to a more effective market and driving better outcomes for those looking to sell or purchase a home.
What is more, this fully digitised property settlement process has been a key factor in allowing the Australian property market to withstand many of the challenges of the COVID-19 pandemic.
According to the PEXA Insights team, Australia’s housing market has recorded 30% year-on-year growth in property sales settlements for the first quarter of 2021 (calendar year) when compared to the beginning of 2020 (pre-COVID-19 restrictions).
For the UK market and consumers, there is recognition in the industry and amongst lenders that this evolution is needed.
PEXA is now expanding into the UK market to support this ambition. We are in the early stages of building our team on the ground and have just announced our partnership with global software consultancy ThoughtWorks, to help shape our platform to reflect the needs of the UK market as we look to bring digital conveyancing to the UK re-mortgage market in 2022.
With a consensus across the market that a digital solution to the UK housing sector is needed, it is crucial that industry, regulators and the Government work together to unlock benefits for consumers and propel the market in to the 21st century.
We should be leaving the paper-based system in the Victorian era and opening the door to digital solutions which can reinvigorate the market as the UK recovers from the economic shock of COVID-19.
We know there’s plenty of work to do, but we also know there is big appetite for change. PEXA stands ready to play our part in helping realise that change.
For more information, please visit us at PEXA UK.