Louisa Fletcher, PropTech editor of Show House, takes a closer look at the announcement of Lloyds, Connells and LMS’ new digital homebuying service and the important step this represents for the industry.
It’s not often that the UK property industry produces something that genuinely feels like progress rather than another iteration of the same conversation. However, the recent announcement from Lloyds Banking Group, Connells Group and LMS of a fully digital homebuying service is one of those moments worth paying attention to.
While the language frames an improvement on the customer experience, reducing stress and speeding up the process (all of which are clearly positives), the real story sits just beneath the surface. It’s also a direction of travel that’s become increasingly hard to ignore.
In conversations with housebuilders over the past few months, there is a clear and growing recognition that this area is moving rapidly up the priority list. Not in response to any one single initiative, but as part of a broader shift in how risk, compliance, marketing and customer experience are viewed across the end-to-end process.
For years, the challenges have been well-understood. Transactions are slow, information is fragmented, the same checks are repeated multiple times, and issues with second-hand stock often emerge far too late in the process.
The result is a system that’s widely recognised as one that creates unnecessary friction for everyone involved, from buyers and sellers through to sales teams, agents, lenders and conveyancers. The new homes sector is not immune to the concomitant delays, uncertainty and fall-through risk that come with this, particularly where chains involve second hand stock.
What this digital homebuying model does differently is not simply digitise the process, but reorder it.
Key information is captured once and shared across the transaction. Identity checks, source of funds and property data capture are all brought forward in the process. Searches are made available sooner. And, most importantly, the flow of information between parties is structured, consistent and proactive, rather than fragmented (at best) and reactive.
It’s a shift that feels obvious, but one that the industry has struggled to operationalise at scale. See Exhibit A: Home Information Packs.
And this is where the real story sits.
Because this isn’t just about customer experience, although this will significantly move the dial in making a convoluted process easier to navigate. It’s compliance infrastructure wearing a customer experience disguise, which is both timely and long-overdue. And I’m absolutely here for it.
Why? Because the same mechanisms that reduce duplication and improve transparency also align directly with the regulatory requirements of the Digital Markets, Competition and Consumers Act (DMCC Act), particularly around Material Information and the requirement to avoid material omissions. It’s not a new conversation, but it is now starting to translate into operational reality.
For the consumer, that translates into fewer surprises, less repetition and a more predictable journey. For the residential property industry, it reduces fall-through risk, improves efficiency and speeds up transactions.
And when best outcomes for consumers align with great commercial outcomes for industry, in my experience, that’s when change tends to follow.
For the new homes sector, the implications are particularly interesting.
On one level, much of this will feel familiar. Housebuilders already operate with a higher degree of control over the product, with known specifications, title and supporting information available from the outset. So, in many respects, in our world the concept of capturing property data upfront isn’t exactly new.
The real shift here, however, is not about the data itself. It’s what happens around it.
Early buyer qualification, particularly around source of funds. Greater certainty at the point of reservation and a more joined-up flow of information between sales teams or agents, conveyancers and lenders. And the prospect of faster transactions, particularly where you’re dealing with buyers in a chain.
These aren’t marginal gains. They go directly to the heart of supporting commercial performance. And right now, I think we can all agree, the new homes sector needs all the help it can get to secure more offers on plots and get deals over the line.
Chris Rosindale, chief operations officer of Connells Group, said: “The results of the pilot spoke for themselves. We know that speed from SSTC to exchange is key for housebuilder clients, and from our trials pre-launch, we saw an increase in speed of 35% from SSTC to exchange, with the added benefit of reducing fall throughs by 43%.”
“Connells Land and New Homes team is the biggest seller of new homes in the UK with over 1200 sites currently, and will be rolling out the National Property Transaction Network (NPTN) over the coming months. We’re really looking forward to bringing the benefits of the NPTN to the new homes sector, which will help housebuilders of all sizes.”
The infrastructure underpinning this shift is also worth highlighting. LMS’s National Property Transaction Network is designed to enable trusted data to move securely and consistently across the transaction, connecting the various parties involved far earlier in the process than has traditionally been the case. Following the initial pilot, it will be open to all estate agents, conveyancers and housebuilders, so everyone is invited to the party.
That kind of connectivity has been talked about for years. However, delivering in a way that’s scalable, aligned to agreed standards and crucially, in a way that everyone agrees is something else entirely. Which is why this is so significant.
Mat Hahn, head of partnerships at conveyancing and property technology provider, LMS, explained: “Collecting more of the required information upfront digitally and making it available to buyers provides increased transparency, resulting in better outcomes for everyone. Rather than this simply being a ‘tick box’ compliance exercise, sharing key data with all the other parties in the transaction via the National Property Transaction Network, far earlier in the transaction than the traditional process, helps to improve outcomes across the board.”
“There is no loser in this arrangement; the consumer wins, the housebuilder wins, as do the conveyancer, lender and mortgage broker too. Everybody wants a faster transaction, and now the technology and regulatory framework are here to deliver that.”
Alongside this, the earlier introduction of financial checks, particularly around source of funds, represents another important step forward. One of the most common causes of delay and uncertainty in the transaction, particularly where chains are involved, is the late discovery of issues that could have been identified much earlier.
Mike Ward, executive chairman of source of funds intelligence firm, Armalytix, explained: “By ordering the source of funds checks earlier, there are numerous benefits for everyone involved. The first one is that you have a better-prepared buyer, who has established where the funds are held and the provenance of that money. This leads to earlier identification of any issues, which can then highlight potential fall-throughs sooner rather than later in the sales process.”
“The second benefit is that, by sharing the sources of funds earlier around all of the parties involved in the transaction, we then have far more effective defences against Money Laundering, which is a compliance issue for everyone, including housebuilders. The benefit to the consumer is that they only have to supply key information and documentation once, rather than multiple times across the transaction. While that delivers a far better experience for the buyer, this in turn, helps to ensure the transaction will exchange and complete faster, ultimately benefitting the housebuilder.”
Taken together, these elements point to a model where the transaction is no longer driven by a series of disconnected steps, but by a structured, data-led process that supports both compliance and sales performance.
That’s not something that happens every day, but it’s a rare case of a perfect storm that actually benefits housebuilders, if correctly implemented.
It’s also where the significance of this announcement really lands.
This model brings together compliance, customer experience and bottom-line impact. And the fact that a player like Connells is driving it tells you everything you need to know about where the market is heading.
For housebuilders, the opportunity is clear. Not simply to adopt elements of this approach, but to ensure that their own data, processes and systems are aligned in a way that allows them to participate fully in this kind of ecosystem.
And for a sector that already holds so many elements of the data required to make this work, the housebuilders that will see a real benefit in embracing their compliance obligations will, far from stymying sales performance, see the benefits on the bottom line far sooner than those who don’t.
For those leaders in our sector that are already on the front foot with the DMCC Act and their Material Information obligations, this will feel like a natural progression. For others, it may serve as a timely nudge that the pace of change is now hard, if not impossible, to ignore.
