Santander’s Fixing the Broken Chain housing report indicated that nearly a quarter (23%) of people said they had tried to buy a property, only for that process to fall through

House sales that fall through are costing the economy at least £1.5 billion per year, according to a report for a major bank.

The bank went on to label the home-buying process as “antiquated”, adding that more than half a million failed transactions a year across England and Wales are costing consumers about £560 million directly and a £950 million hit to the wider economy.

Santander’s Fixing the Broken Chain housing report indicated that nearly a quarter (23%) of people said they had tried to buy a property, only for that process to fall through.

The report said: For most people, buying a house is their biggest financial commitment.

The process as it stands simply does not reflect that. In an era that is marked by digitisation and ease for so many areas of day-to-day life, the property market sticks out like a sore thumb, the report said.

In the report, David Morris, head of homes at Santander UK, said: Our conservative calculation shows that £1.5bn a year is lost in the economy and by consumers from failed property transactions.

The research was based on economic analysis from WPI Economics, as well as a survey of more than 2,300 consumers by JL Partners carried out in July.

It estimated that about 530,000 housing transactions fail each year in England and Wales.

The economic analysis indicated that the direct cost to consumers of this through spending that cannot be clawed back, such as mortgage and solicitors’ fees, is £560 million annually.

The vast majority (85%) of people who experienced a failed transaction reported a financial loss, researchers found. The average cost was £1,240 per failed recent transaction.

The research indicated that 17% of unsuccessful transactions collapsed after one month, while 43% of failed transactions happen at or beyond the three-month mark.

To help prevent sales falling through, Santander wants to see gazumping, where a seller accepts another higher offer on their home after previously verbally agreeing a deal, and gazundering, where a buyer reduces their offer at the last minute, disincentivised.

The bank also wants to see better up-front collation of information from those involved in transactions.