House sales that fall through before completion are costing the UK economy at least £1.5bn every year, according to fresh research carried out by Santander. The report shines a light on just how disruptive collapsed property chains are – not only for buyers and sellers but also for the wider economy.
Each year, more than 530,000 transactions in England and Wales fail to reach completion. This figure represents a significant number of people who face both financial and emotional setbacks during what should be one of the most exciting chapters of their lives.
The direct financial loss to consumers is estimated at £560m annually. These costs come from fees that cannot be recovered, such as mortgage charges, solicitor payments, and survey costs. Buyers often find themselves paying out hundreds or even thousands of pounds with nothing to show for it when a sale collapses.
But the impact goes further. Santander’s analysis, published in its report Fixing the Broken Chain, highlights that the wider economy suffers an additional £950m hit. This includes lost productivity, wellbeing costs, and leisure time wasted. In other words, the effects ripple out far beyond the individual buyer or seller.
The study was produced using independent research from WPI Economics, along with a survey of more than 2,000 consumers conducted by JL Partners. Together, the findings paint a detailed picture of the true cost of failed housing transactions.
One of the key takeaways is that almost a quarter of buyers (23%) have experienced a collapsed property chain. This makes it a common problem within the housing market, affecting a significant share of households across the country.
The economic analysis also revealed that 85% of buyers involved in a failed transaction suffered some form of financial loss. While the average setback was around £1,240 per person, one in five respondents said they lost more than £2,000. These figures underline just how costly the process can be when things go wrong.
To put this in context, the government had earlier estimated the annual consumer loss at around £400m. Santander’s report suggests that the real figure is closer to 40% higher, raising questions about whether official forecasts have underestimated the scale of the issue.
Beyond finances, the study highlights the toll on mental health and wellbeing. More than half of homebuyers (54%) reported feeling frequently stressed during the transaction process. Among those whose sales collapsed, the numbers are even higher: 64% reported elevated stress, 57% faced increased anxiety, and 49% struggled with disrupted sleep. Around a quarter (26%) even reported strain in their personal relationships.
This emotional burden is compounded by the drawn-out nature of the property-buying process. Fewer than one in five (17%) failed sales collapsed within the first month, meaning that most buyers had already invested significant time and money before their transactions fell apart. A striking 43% of failures happened three months or more into the process.
Even those who managed to reach the later stages found it challenging. More than a third (38%) of people described exchanging contracts and moving as particularly difficult. This suggests that the stress of buying and selling a home often escalates the longer the process drags on.
The experience of a failed transaction is enough to put many people off moving altogether. According to Santander, more than a quarter (28%) of buyers who went through a collapse said they were less likely to consider moving again in the future. This reluctance could potentially slow down the housing market if left unaddressed.
In contrast, the research found that a smoother and more modernised system would encourage confidence. As many as 88% of buyers who had moved recently said they would be more willing to move again if the process were simplified. This highlights the need for reform to restore faith in the housing market.
David Morris, Santander UK’s head of homes, said that buying a home should represent a time of “excitement and hope.” Instead, for too many, it has become “an uncertain and exhausting process” that undermines both their finances and their wellbeing.
Morris added that the housing market still relies on a framework established more than a century ago, describing it as “an increasingly heavy anchor weighing on the economy.” He urged the government to push forward with reforms to make transactions quicker, simpler, and more reliable.
Among Santander’s recommendations were calls for faster digitisation across all areas of the property market, the creation of a centralised government-owned data hub, and the use of artificial intelligence to streamline processes. The bank argued that such changes could help reduce stress, save money, and ultimately give buyers and sellers more confidence in the system.
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