The Intermediary – October 2025 - Flipbook - Page 89
T E C H N O L O GY
Opinion
Cutting fallthroughs promises
greatest dividend
I
t’s just been revealed that in
the last year, 312,691 home
purchases were cancelled aer
their sale had been agreed,
according to TwentyCi. That
means more than one in five
transactions fell through.
To blame is the sheer amount of
time it takes to complete, with life
events such as births, marriages,
death, divorce and changing financial
circumstances all taking their toll.
The truth is that fall-throughs have
been hiing these levels for years.
What’s really changed is the
sense of resignation and fatigue that
had built up around this problem.
While brokers and lenders have
been squeezing the lemon to bolster
margins in all kinds of other
ways, this issue has been seen as
untouchable, a fact of life, despite
costing the whole industry billions of
pounds a year.
So, the Government’s proposals
in early October for more upfront
information and a greater
commitment from buyers should
be welcomed.
It’s an exciting time for the
mortgage space. There’s a sense that,
alongside new smart data schemes
that promise to make the homebuying
process a whole lot more joined
up, this problem isn’t unbeatable
any longer.
The main thing lenders and
intermediaries should know is that
this isn’t a spectator sport. We’re
already seeing huge investment and
collaboration in the open network
approach that will make all this
possible, and new solutions are
springing up in every corner, from
agents right through to conveyancers
and lenders. They will all want to ‘own
the customer’ in the end, but they’re
not all going to succeed.
Regardless of who wins that bale,
the impact fewer fall-throughs and
faster completions could have on
revenue and profit margins at lenders
and intermediaries is impossible to
measure, but hard to overstate. It’s not
just about cancellations, either. The
customer journey is being redesigned,
which is opening the opportunity to
offer ‘in-life’ products to boost margin
growth, too.
Letting the dust settle
This all comes against a backdrop
of other changes from the Financial
Conduct Authority (FCA), the impact
of which are uncertain. We’re talking
about the removal of the interactive
dialogue test (the interaction trigger)
and the introduction of Modified
Affordability Assessments (MAAs).
Whether or not the laer will
outweigh the former and lead to a rise
in remortgages (advised sales) remains
to be seen.
So, while we wait to see how the dust
seles, it’s important to remember
that cancellations will be costing you
far more.
Yes, you can argue that many of
these buyers and sellers do transact
eventually aer a deal falls apart, but
that’s too simplistic. Brokers invest
time and money aracting customers,
advising borrowers and dealing with
partners like lenders and packagers.
Lenders are unable to reallocate the
capital they offered to a borrower
when the sale falls through, and this
has knock-on effects for their return
on capital and what they can offer
other customers.
All this can be avoided once the
industry embraces Horizontal Digital
integration (HDI), shorthand for the
open networks and data standards
that will come to define a new age of
transparency and interoperability
CHRIS WILLIAMS
is strategy and transformation
partner at Novus Strategy
between all the actors involved in a
home purchase.
The industry has reached a level
of digital maturity where this can
become reality. There are companies
out there that have already started
building the technology we need, as
well as organisations like the Open
Property Data Association (OPDA)
that are helping to steer the open data
standards that make all this possible.
You won’t have to build your own
tech stack, or necessarily even replace
the systems you’ve got, though there
is a ‘right way’ and ‘wrong way’ to
configure technology to exploit shared
digital infrastructure.
The big prize? Separate to the
above, intermediaries stand to gain
from sheer weight of numbers. If
transaction times are slashed, none of
us really have any idea how that will
affect people’s appetite to move.
At the moment, it’s a frustrating
inconvenience. If it took weeks not
months and wasn’t as stressful, how
many more people would buy a new
home for lifestyle reasons? How many
would chase a new career move or buy
to be closer to family?
That could mean hundreds of
thousands more advised sales a year,
and brokers and lenders have a key
role to play in geing us there.
If we can reduce completion
times and make the process more
transparent, the fall-throughs and
delays that dissuade people from
moving will fall sharply, and this has
already been demonstrated by a series
of industry pilots.
This isn’t an unbeatable problem,
and tackling it will have the biggest
impact on revenues. ●
October 2025 | The Intermediary
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