There is something rather strange about the way we sell homes in Britain that has become so familiar we rarely stop to question it. A homeowner decides to sell an asset worth hundreds of thousands of pounds and, almost immediately, somebody else begins absorbing the cost of taking that asset to market.
The estate agent may value the property, arrange photography and floorplans, prepare the particulars, pay for portal exposure, conduct viewings, negotiate the offer and then spend months helping to hold the transaction together. In the traditional model, much of that work is undertaken before the seller has paid anything towards it, because the agent's main income will generally arrive only if and when the transaction eventually completes.
For years, we have described that model as consumer-friendly, and of course there is an obvious appeal in telling a homeowner that there is nothing significant to pay unless the property sells. But I increasingly wonder whether we have confused consumer friendliness with transferring almost all of the early financial risk onto the business providing the service.
That distinction matters more now than it did when costs were lower, transactions were quicker and money was cheaper. Today, a property can be agreed for sale within days and still take another four months or more to complete. During that period the agent continues paying salaries, portal subscriptions, software costs, premises, insurance, utilities and all the other expenses involved in running the business, while the income associated with the transaction remains somewhere in the future. Worse still, a significant proportion of those transactions will never complete at all.
When you stand back from it, it is quite an unusual economic arrangement. The industry can celebrate an agreed sale while the business that generated it may still be months away from turning that work into cash, and may ultimately receive nothing.
That is why I think the conversation around speeding up home moving needs to become much more serious. We have tended to frame slow transactions as an inconvenience for buyers and sellers, which they certainly are, but there is a much bigger commercial issue sitting underneath them. When operating costs are high and margins are under pressure, the length of time between doing the work and getting paid starts to matter enormously.
Perhaps we have spent too long measuring how quickly properties attract offers and not enough time measuring how quickly those offers become completed revenue.
There is another problem with the way the system has evolved. Much of the delay that follows an accepted offer are not completely unpredictable. We know before a property goes onto the market that information will eventually be required about its title, alterations, boundaries, rights, restrictions, fixtures, leasehold arrangements where relevant, and the many other issues that can affect a transaction. We know the seller will need to provide information and that lawyers, lenders and buyers will eventually ask questions. Yet historically, much of that preparation has been allowed to begin only after the buyer appears.
That is a peculiar sequence when you think about it. We can spend considerable time making sure the property looks ready to sell while doing comparatively little to establish whether the transaction behind it is ready to move.
The problem is not that every issue can be anticipated or resolved before marketing begins. Property is too complicated for that. The problem is that we often wait to discover things that could have been discovered earlier, and the timing of that discovery changes everything.
A missing document or title complication identified before marketing is something that can be investigated. The same issue appearing three months into a chain can threaten several connected transactions, after buyers have spent money, mortgage offers have been issued and people's lives have begun organising themselves around an expected move. The underlying problem may be exactly the same, but the cost of discovering it late is dramatically higher.
This is why I think the industry's definition of “ready for market” now needs to evolve. A property should not really be considered ready simply because the photographs are finished and the listing can be uploaded. In a modern transaction, readiness should increasingly mean that the work needed to get the sale completed has begun as well.
There is also a wider commercial question here that the UK industry perhaps avoids because the existing model has been around for so long: why should the agent finance so much of the process in the first place?
There is no such thing as free marketing. Photography has a cost. Floorplans have a cost. Portal advertising has a cost. Staff time has a cost. Viewings, administration and sales progression all have a cost. When the homeowner is told these things are included for free, they have not stopped costing money. The cost has simply been moved somewhere else. Usually, that somewhere else is the agent's balance sheet.
This becomes particularly interesting when you compare the British model with parts of the Australian market. Australia has not solved every problem in property, nor would it make sense for Britain simply to copy another country's system, but the way marketing costs are treated there raises an important question.
In Australia, it is common for the seller's marketing expenditure to be treated separately from the agent's success commission. The vendor may contribute upfront towards photography, advertising, portal exposure and the wider marketing campaign, often choosing between different levels of promotion depending on the property and the campaign they want to run. The agent's main selling commission can still remain dependent on a successful outcome, but the real costs of taking the property to market are not necessarily carried entirely by the agency until completion. That seems to me to be a much more balanced way of thinking about risk.
The homeowner is selling the asset and has some financial commitment to the process. The agent still retains a strong incentive to complete the sale because the principal commission remains tied to success, but the business is not necessarily expected to bankroll the entire early part of the transaction.
What I find particularly interesting is not whether Britain should introduce exactly the same charging structure, but what the comparison tells us about the assumptions we have made here. We have become so used to “free photography”, “free floorplans”, “free portal advertising” and “nothing to pay unless we sell” that we have almost created an expectation that marketing a property has no real economic value in its own right.
Perhaps that has also contributed to the volume mentality that dominates parts of the industry. If income is delayed until the very end and every instruction carries substantial upfront cost, the natural response is to win more instructions and feed more transactions into the pipeline. Yet if the pipeline itself is slow and unreliable, adding more volume does not necessarily solve the underlying problem. It can simply create more work that has not yet been paid for.
This is where I think the conversation becomes much more interesting than simply whether agents should charge something upfront. What if any initial contribution from the seller was not merely about recovering advertising costs? What if it also funded the preparation needed to make the transaction genuinely ready?
The seller could begin providing the relevant property information when they instruct the agent. Material Information could be gathered properly. Documents could be assembled. The legal process could begin earlier. Known complications could be identified before a buyer and an entire chain were depending upon them.
At that point the seller is not simply being asked to contribute to the agent's overheads. They are paying towards something that has a direct bearing on their own likelihood of achieving a successful move. That is a very different proposition.
It also starts to address two weaknesses in the present system at the same time. The business receives some income when genuine work begins, reducing the extent to which it has to finance the whole process until completion, while the transaction itself starts being prepared earlier, increasing the possibility that the eventual buyer enters a much healthier sale.
This is one of the reasons I think Sellers Packs should be viewed as something much more significant than another collection of forms. The opportunity is to move the starting line of the transaction. At the moment, we tend to behave as though the transaction properly begins when the buyer makes an offer. I think it should begin when the owner decides to sell.
That change sounds relatively simple, but its implications are considerable. It means marketing preparation and transaction preparation begin to happen alongside one another. By the time the buyer arrives, the process already has momentum. The offer becomes an acceleration point rather than the moment everybody starts assembling the basic ingredients of the sale.
Government reform is already moving in broadly the same direction, with increasing emphasis on upfront information, digital property data and reducing the number of issues that surface late in the process. That should not simply be regarded as another compliance exercise that the industry will eventually have to accommodate. It is also an indication that the existing model has reached a point where the levels of delay and uncertainty are becoming increasingly difficult to defend.
I think the wider economic environment makes the timing particularly important. Businesses are dealing with a permanently higher cost base than they were accustomed to a few years ago. Households remain under pressure. Borrowing still has a meaningful cost. Every week that a transaction remains unresolved has a real financial consequence somewhere, even if it does not appear neatly on a balance sheet as a line called “delay”.
The industry has historically been able to absorb a surprising amount of inefficiency because it became normal. We built sales progression around it. We built chasing around it. We employed people specifically to navigate around the gaps in the process. None of that means the inefficiency itself is inevitable. I suspect that is the real issue property businesses need to start confronting.
The next commercial advantage may not come from generating more leads or agreeing more sales. It may come from converting more of the business they already win, shortening the time between instruction and income, and reducing the amount of work that disappears when a transaction collapses.
That is why I think the Australian comparison is useful. Not because Australia provides a blueprint, but because it reminds us that the British model is not a law of nature. We chose, over time, to normalise a system in which much of the early cost sits with the agent, much of the preparation waits for the buyer, and much of the revenue waits for completion. Those choices made sense in a particular market environment. We should not assume they will continue making sense in the next one.
The property industry is entering a period in which speed, certainty and cashflow are likely to matter more, not less. At the same time, government policy is moving towards earlier preparation and consumers are becoming less tolerant of transactions disappearing into months of uncertainty. Perhaps this is therefore the moment to rethink the whole sequence rather than trying to make the existing one marginally quicker.
The homeowner decides to sell. The property is prepared for the market and for the transaction at the same time. The seller makes a reasonable commitment towards the genuine work being carried out. Problems have an opportunity to emerge while they can still be dealt with calmly. The buyer arrives into a transaction that has already begun rather than one that has yet to be assembled.
The success commission can still reward the successful completion. No one is arguing that agents should stop having skin in the game. But perhaps the seller should have some too.
More importantly, perhaps an industry facing rising costs and transactions that can still take months to complete should stop accepting a commercial model in which so much work is carried out before anybody knows whether it will ever be paid for.
The home-moving process has been slow for so long that slowness itself has become normal. The danger is assuming that because the industry has managed to live with that model until now, it will remain commercially sustainable indefinitely. I don't think that assumption is safe anymore.
The question facing property businesses is no longer simply how quickly they can get another home onto the market. It is whether the way we prepare, fund and progress that sale is still fit for today's economy in which every completion, every week and every pound of working capital matters.