Sprift data analysis proves that upfront property data does reduce fall through rates
We recently released the findings of our study around the impact of providing buyers with enhanced information at the point of first marketing a property, and the direct correlation this has in terms of reduced fall through rates.
The Sprift data science team analysed 1.2million listings between 1st January 2022 and 31st December 2022 to understand the difference in fall through rates between agents who use the Sprift platform to provide enhanced data to buyers and those who don’t.
The analysis suggests that overall, agents who don’t use Sprift experience an average fall through rate of 29.3%, compared with agents who do use the Sprift dashboard and Key Facts for Buyers reports experiencing an average fall through rate of 25.4%, meaning a 13.31% reduction in real terms of deals which don’t complete.
Matt Gilpin, CEO and Founder of Sprift comments, “Whilst we’ve been quietly confident for a very long time that providing buyers with as much information as possible on a property at the earliest opportunity would have a positive effect on fall-through rates, it seems very fitting that Sprift is still only seven years old, our data analysis now suggests this is indeed highly likely to be the case. Data can’t and won’t ever be able to mitigate every situation in which either a vendor or a buyer decides to withdraw from the transaction prior to exchange, however what we can point to is a direct correlation between agents providing significant information to a buyer at that critical point of first engagement, such as our Key Facts for Buyers reports, and a reduction in average fall through rates.”
Matt Gilpin continues, “While there is still a significant debate in the property sector around what ‘upfront information’ actually means and how it should be used, as at the moment we still don’t have a legal definition of the term, what we are confident in saying is that the super set of Material Information as defined by NTSELAT which forms the Sprift Key Facts for Buyers report does appear to have a positive effect on agents’ pipelines and therefore, also protects their income. Working on the basis that the average commission charged by an agent is circa. 1%, depending on where the agent is located of course, and therefore, the average fee earned is circa £2,940 excluding VAT, again allowing for regional variations, by ensuring that just one property every month which may have fallen through instead successfully completes, the financial benefits to agents of providing enhanced data upfront to buyers is very significant.”
Matt Gilpin concludes, “The debate still rages on as to whether or not legislation needs to change in order to mandate upfront searches or vendor-provided information by way of a completed BASPI or TA6 and TA10. However, our data study unequivocally identifies that pulling together key elements, such as the boundary plan, flood risk, whether the property is in a Conversation Area or AONB, if there are any TPOs or flagging if the property is Listed and showcasing all of that information in a report that’s ‘user friendly’ for a consumer to understand, increases the agent’s success rate in terms of completed transactions”
1.2m sales listings across 13,958 branches over a 12-month period were analysed to determine how many sales fell through in that time. The listings analysed were across all postcode districts within the UK.
For this study, a property is deemed to have fallen through if:
1. It is Sold Subject To Contract (“SSTC” or equivalent term); and
2. The same listing is reinstated to “For Sale” within 180 days of the SSTC date.
The market data was then analysed by whether the estate agents listing the properties were Sprift clients or not. To be as prudent as possible in our calculations any agent that was not a client for the whole 12-month period was treated as non-Sprift, even if they were with us for 364 days.
To confirm the statistical validity, figures were adjusted to reflect a 95% confidence interval and the p-value determined as <0.01. These suggest that the results are statistically significant and can be relied on.
For the purposes of this press release, the average UK estate agent percentage commission was advised by the Innovation Collaboration Group (ICG) according to insights gathered and is an approximate percentage, therefore should not be deemed to be econometrically accurate.
The average UK estate agent fee was calculated based upon average UK property price as per the ONS UK House Price Index December 2022 (released 15 February 2023) which suggests that, as of December 2022 the average house price in the UK was £294,000. The average UK estate agent fee figure, as quoted in the release, excludes VAT.