the key to streamlining property transactions – Mortgage Strategy

Joe Pepper, UK CEO, PEXA

Most people have heard of PEXA by now, primarily as the Australian business which delivered a truly digital conveyancing experience to the Australian market over the past 10 years or so.

However, having been in role as UK CEO of the PEXA business since October 2023, I am often asked how PEXA intends to deliver a similar level of transformation to the infamously fragmented UK marketplace, where others have famously launched and failed.

Confronting the digital conveyancing challenge

I typically respond by pointing out that the scale of the problem indicates the necessity for change. Transaction times are getting longer, the number of fall-throughs is increasing and the finger-pointing is becoming more virulent.

I was reassured to hear how open to change the industry is

Conveyancers are working longer and harder for thinner margins. Consumers are voting with their feet, choosing to move house or transfer their mortgage less often as they realise how much hassle moving and remortgaging entails.

The question then evolves into why and how PEXA will be able to deliver the change that will improve the process, particularly where others have failed.

The first point to note is that PEXA delivers a proven proposition in a respected jurisdiction with a similar legal framework.

The second is that PEXA is committed to taking its successful proposition beyond the UK to other Torrens Title systems across the world. As such, there is a strong determination to make this work in the UK as a key proof point for that strategic goal.

The combination of PEXA, Optima Legal and Smoove means we will be able to rapidly improve the sharing of data in a common form with all parties

The wider business continues to invest substantially in the UK solution, assembling a strong UK leadership team with decades of experience in delivering services to the UK market.

Delivering a transformative payments system

As a result, in collaboration with the Bank of England, PEXA has developed and launched the first payment system specifically designed around the needs of the property market (“PEXA Pay”). Over the past two years, it has brought 11 UK lenders through the testing programme successfully, which is a necessary precursor to going live with PEXA.

We have two UK lenders now live on the system (Shawbrook Bank and the Hinckley & Rugby Building Society), with two top 10 lenders currently intending to go live in the summer. The impact is obvious, as Shawbrook Bank has shown in recent weeks with complex buy-to-let and limited company remortgages executed in a fraction of the time it took previously.

The scale of the problem indicates the necessity for change

We anticipate that mainstream residential remortgages can be completed within 24-48 hours using the PEXA solution, providing certainty for lenders and consumers alike, and ultimately delivering more choice and ease of use for consumers. We are in discussions with most of the biggest UK lenders and their origination providers around timescales for onboarding, and anticipate demand for early adoption increasing significantly once the top 10 lenders start using the platform in the summer.

Scaling our proposition to accelerate transformation

We have made this possible through the acquisition of Optima Legal, a specialist remortgaging provider, from Capita in December 2022, and through the subsequent 12-month programme migration away from the embedded Capita processes and systems to create an integration between the PEXA system and Optima Legal’s internal case management systems. We have also made it clear that we will offer the same access to the PEXA system to other major remortgage providers too.

This means we now have a proven remortgage proposition, which is becoming more established over time. Our next task is the larger and often thornier issue of sale & purchase, where transactions are not centralised in a handful of specialist conveyancers but rather spread across over 4,000 providers of all shapes and sizes.

Our next task is the larger and often thornier issue of sale & purchase

That said, this is already part of the established solution in Australia, and we have been working for over a year on developing the solution to meet the nuances of the market across England and Wales.

That solution will be completed by the end of this year, with the expectation that conveyancers will be able to use it from the start of 2025, either on a standalone basis or via integration with their existing case management systems. The benefit case for a conveyancer is substantial and, having attended two major conveyancing conferences recently, I was reassured to hear how open to change the industry is and how excited it is about the potential for using PEXA.

To further develop our expertise and speed up the onboarding of conveyancers to the PEXA platform, we acquired Smoove in December 2023. This gives us access to over 2,000 conveyancers via its eConveyancer platform, through which we can effectively offer the PEXA solution and reach just over half the market the day after we launch the sale & purchase proposition. The Smoove solution already links lenders with conveyancers, as well as brokers and estate agents with consumers, and we expect to expand those relationships in due course.

We anticipate that mainstream residential remortgages can be completed within 24-48 hours

Ultimately, the combination of PEXA, Optima Legal and Smoove means that we will be able to rapidly improve the sharing of data in a common form with all parties (we are executive members of the Open Property Data Association). This will ensure we can deliver the digital journey which will allow us to rapidly reduce the time taken to complete property transactions in England and Wales, reduce the associated fall-throughs, drive up productivity and reduce the risk for all parties.

Only then will the consumer experience improve to such a point that moving house or refinancing is no longer something to fear.

Keen to find out more when it happens? Sign up for updates on our website at: www.pexa.co.uk/register/.