Data Forms the Bricks of Reform – The Commercial Model is the Mortar

The Home Buying and Selling Reform Roadmap phases in four things that aim to make a real difference: upfront sales packs, binding conditional contracts, reusable identity, and digitalised property data. Voluntary at first and bound in legislation later. Most will read it as policy, but I would encourage you to read it as a data specification instead. Almost every measure in it changes the grade of property information used at each stage of the process, how it is verified, trusted, refreshed, and how it reaches the people and systems making decisions in the property transaction.

“One in three sales still fall through, and they fail late, when the truth about a property surface after everyone is already committed.”

The core problem that upfront sales packs go after is one we all know well. Around one in three home purchases fall-through before completion, according to MHCLG’s numbers, and they tend to fall-through late. A survey comes back with a condition issue nobody expected, or important issues such as tenure, planning constraints, climate risk or service charges come to light. By that point, offers have been made and money has been spent, so the chain collapses under the weight of a fact that was true all along but only comes to light too late in the process.

What the upfront sales pack really changes

The upfront sales pack goes straight at that. It puts verified property facts at the start of the process, before the offer, before the mortgage application and before conveyancing. Bringing the discoveries that break chains forward, to a point where nobody is committed, and the biggest single cause of fall-through starts to shrink. For lenders, there is a secondary effect: the property data for a lending decision now arrives through the process rather than directly from their trusted data providers, and the lender must be willing to treat this data as current and trusted financial-grade data.

The interesting detail sits in the guidance the government still has to write. It has said it will define how the information ages, when search data needs refreshing, and what it takes to earn ‘lender acceptance and buyer trust’. Strip that back and a sales pack is really a set of dated, sourced claims about a property, and its worth to a lender and conveyancer comes down to where each claim came from and how current it is. So the data sourced needs to be for the duration of the property transaction and refreshed at each milestone to reflect any real-world changes, but also any corrections or clarification made by the professional stakeholders executing the transaction, which mustn’t be overwritten.

Data must be financial and legal grade; otherwise it’s sub-grade for reuse. Reuse only works if information is the same grade the lender and conveyancer would have sourced themselves as required by their respective regulatory frameworks: Tied to the exact property, from a recognised source, fresh enough to trust. That’s what financial grade means, and it points to who is well placed to supply it. The providers that already supply lenders with property data and automated valuations ingest and curate all this information from ‘trusted data sources’ to feed their models, which must meet financial-grade model-risk governance. So they are uniquely ready to serve this data need across the whole transaction alongside Search and Legal Indemnity providers who supply conveyancers.

The missing piece is not capability

As someone who works every day on prop-tech products, I think nothing the roadmap relies on is still waiting to be invented, yet horizontal integration has still not happened. Over the past decade I have worked at Hometrack, at CLSQ and now at TwentyCi, and across those brilliant teams and others our industry has already built virtually every piece of technology this reform needs. The ever-increasing ability to automate valuation and risk decisions. Innovative insurance that takes on liability. The financial-grade property data and property market intelligence that powers all of it. And, in the LMS National Property Transaction Network, the open infrastructure to connect everyone and let verified data pass across the transaction. It exists. It works. It’s running today.

So, at the heart, this is not a technology problem or a data problem but a commercial one. Each of those innovations grew up inside a different company, on its own commercial model, and of course with overlap. And most providers serve one or two specific stakeholders in the property transaction, be that Estate Agents, Brokers, Lenders, Surveyors or Conveyancers. The hard question is how these independent providers work together, to augment rather than compete, so that the financial-grade data crosses existing horizontal stakeholder boundaries without friction. Gone are the days when anyone wants a single provider or system that does everything. So lenders have a role to play here, in engaging with forward-looking commercial models that enable financial-grade property information they currently procure to flow across the whole property transaction.

“The capability already exists. What we have not defined yet is the way of working together commercially across the transaction.”

Let’s build the commercial model that makes the data flow

That’s why the voluntary phase matters far more than its profile suggests. It’s the window where the commercial models should get written. Whatever the market settles on now, how data gets priced, how liability is shared, how one party learns to trust another party’s output as its own input- is what the later legislation will most likely lock in. We get one clean chance to shape that by working it out together, as lenders and providers, rather than have something handed down to us.

As per the design principles set out in the reforms, we need ‘a whole system approach’;

• The data needs to be licensed for the duration of the property sale, reusable for a reasonable period, regardless of the buyer and refreshed at transaction milestones.
• Financial grade property information that lenders use is valuable, and this cost still needs to be covered even if it’s needed before the lender buys it. But this cost is actually a fraction of the overall costs incurred by a seller in the transaction. Estate Agents and Brokers shouldn’t have to incur this cost and its not as valuable to them as it is for lenders and conveyancers.
• An issue has always been fall-through, in that the cost of data will apply at a time in the process where the current likelihood of fall-through is 1 in 3, driving Estate Agents to look for the cheapest data they could find, generally not financial grade, in the previous implementation of material information.
• However, fall-through should be significantly reduced by providing upfront information. And if licensed to the seller for the ultimate sale of the property, the great majority of homes go on to sell within 12 months, often to the second buyer.

So my ask lands on my own side of the table as much as on lenders. Providers, including us, TwentyCi, should treat this phase as something we design together. Pool what already exists, accept that our capabilities overlap, and work out the commercial arrangements that let them plug into one another. Get that right in the voluntary window, and we hand the legislators a working model instead of a blank sheet. That, far more than any one dataset or innovation, is what we can contribute most to making the reforms a meaningful and lasting change to the home buying process that happens as quickly as possible.