By Jack Bidgood, Co-founder, Thirdfort.
The UK Government’s recent pledge to modernise the property market through digitalisation is a welcome step towards a more efficient home-buying process. The proposed reforms, aimed at streamlining transactions and reducing sales falling through, promise to bring much-needed improvements to an outdated system. Such Government backing is invaluable. In tandem, private sector innovation is driving the digital transformation of the housing market.
(See the Government announcement here.)
A System in Need of Overhaul
Buying a home in the UK is a historically arduous process. The average transaction takes just under six months, during which time many buyers and sellers endure significant uncertainty and financial risk.
Around a third of property transactions reportedly fall through, costing an estimated £400 million annually. The Government calculates that these inefficiencies also result in four million lost working days for conveyancers and estate agents, equating to a £1 billion drain on the economy. In contrast, countries like Norway complete home sales in just one month, demonstrating that a faster, more efficient system is possible.
The root of the problem lies in fragmented, paper-based processes. Key property data is often difficult to access and not in machine-readable formats. Buyers are also often required to provide the exact same identity and financial verification multiple times throughout the process, leading to unnecessary delays and security risks.
The Government’s Plans
To address these challenges, the UK Government has launched several initiatives. For example, the Ministry of Housing, Communities and Local Government has launched a 12-week project to establish rules for digital data sharing between conveyancers, lenders, and other parties involved in property transactions. HM Land Registry is also taking on the challenge with a ten-month pilot project with local councils to improve the accessibility of property records.
Reforms also include ‘driving forward’ digital identity verification services to streamline the buyer authentication process. These measures aim to create a fully digitalised home-buying system, reducing transaction times and increasing certainty for all parties involved.
These initiatives align with broader housing policies, including planning reforms, the construction of 1.5 million new homes, and revisions to leasehold laws. The Government is positioning digitalisation as a critical component of its Plan for Change, a strategy designed to modernise the economy and improve living standards.
A Market Already Embracing Digitalisation
While Government intervention is an important catalyst for change, the property sector has already begun its digital evolution. One of the significant areas of transformation is digital identity (ID) and, alongside this, source-of-funds verification. Historically, buyers have had to provide ID and financial proof separately to estate agents, mortgage brokers, lenders, and conveyancers, often more than three times per transaction. This repetitive, manual process is slow, inconvenient, and prone to errors.
Technology has already provided a solution. AI, biometric verification, cryptographic security, and Open Banking integrations now allow homebuyers to verify their ID and funds via their mobile phones in minutes rather than weeks. Digital ID services, such as those compliant with the UK Digital Identity & Attributes Trust Framework (DIATF), provide a secure and shareable verification method.
This not only reduces transaction times but also mitigates fraud and enhances regulatory compliance for property professionals. With this foundation already in place and the private sector innovation we’ve seen (and, in Thirdfort’s case, been a key part of), the property market is well-positioned to leverage new digital solutions at scale.
More broadly, the future world of digital ID is just around the corner. Outside of the property market, we’ve seen notable developments, from introducing digital driving licenses to a new EU framework around digital identity (the so-called ‘digital wallets’).
While digital verification within property transactions is a more complex process involving, for example, a range of financial information related to aspects such as source of funds and affordability, alongside identity checks, it’s crucial that these initiatives are all aligned. We don’t want to end up in a situation that, despite being digital, is equally convoluted for consumers.
A Digital-First Property Market
The shift towards a fully digitalised property market is inevitable. Government support is crucial for overcoming systemic challenges, such as standardising data access and encouraging cross-industry collaboration. Private sector innovations have already demonstrated that digitalisation can improve efficiency, security, and customer experience. By embracing these advancements, the UK property sector can move closer to a streamlined, modernised system where transactions are faster, safer, and more reliable.
The Government’s commitment is welcome. Meanwhile, private sector innovations can continue to drive the digital revolution in UK property transactions. Now, the challenge lies in ensuring that regulatory frameworks and industry standards evolve alongside technological advancements to unlock the full potential of a digital-first property market.
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Many thanks to Jack Bidgood, Co-founder and Chief Product Officer at Thirdfort, for writing this educational think piece for Artificial Lawyer.
Thirdfort provides a range of automated ID verification, anti-money laundering, and Source of Funds checks, with a strong track record in the property sector. You can find more information about Thirdfort here.