New study reveals the truth about regional house buying companies

Selling a house can be a daunting and time-consuming process. That’s why many homeowners in the current market are choosing to sell their houses in a faster, more convenient way by selling their house directly to a company.

These companies purchase properties directly from homeowners without the use of a traditional mortgage, this cuts the red tape and waiting time meaning that they can buy your house in just a couple of weeks, if required, substantially less than the 25 – 29 weeks that it can take to sell on the open market.

There are many factors to consider when deciding which company to sell your home to. A crucial decision is whether to opt for a regional or national house buying company.

That’s why we conducted a study that compared key characteristics of regional vs national house buyers so you can make an informed choice when it comes to this crucial decision.

Understanding the House Buying Company market

House buying companies are business that specialise in buying houses fast, usually at a discount to market value of around 20%, if you can’t afford that discount then this market isn’t for you.

These companies can broadly be categorised into 2 types;

Regional house buyers – These are smaller operations focussed on a particular geographical area, this area can be as narrow as a specific city or as broad as a country such as Wales or Scotland but the key distinction is that they have a geographical focus that is not the whole of the UK. They are often local property developers or investors that are looking to purchase properties at a discount to either develop or sell on quickly for a profit.
National house buyers – These tend to be much larger companies that will purchase properties anywhere in england and Wales, while some do purchase properties north of the border in Scotland most do not due to the differences in Scottish property laws so for the purpose of our study a ‘National’ company is one that services the whole of England & Wales.

Choosing the right company is essential to ensuring a quick sale with a high standard of service, we’ll explore key aspects such as registrations with various bodies such as the property ombudsman (TPOS) and the National Association of Property Buyers (NAPB) which can be an indicator of higher service standards, along with looking at customer reviews and if they are even registered officially as a company at all.

So let’s get started.

The study

How many are actually registered companies

As outlined in our article ‘how to check that you are dealing with a legitimate cash house buyer’ it is essential to only deal with house buying companies that are just that, companies.

If they are not you are just dealing with a private cash buyer, sure they may be able to buy your house and they might even be able to do it faster than a mortgage buyer but they won’t have the infrastructure and processes in place to deliver a smooth seamless experience for the seller, it will also be much harder to contact them and ‘customer service’ will be non-existent along with any formal complaints procedure if things take a turn for the worst. Basically if they aren’t even a company you are stepping into a minefield of unaccountability that can be easily avoided.

To check this we cross referenced their online credentials with official data from Companies House

Registered Companies Data:

Regional Companies: 50% were registered companies.
National Companies: 86.15% were registered companies.

Key Takeaway:

This is one tick for the National house buying companies, they are far more likely to be registered compared to regional buyers. When dealing with any house buying company whether they be regional or national it is wise to check for their registered business number, go to companies house and check that they are a legitimate trading company. This is a simple check that can save you a lot of wasted time and stress.

a bar chart depicting the percentage of regional and national house buying companies that are registered companies

How many are registered with The Property Ombudsman (TPOS)

The next check on our list was how likely they are to be registered with TPOS. TPOS is an independent body that offers a redress scheme to customers that feel they have been mistreated during a property transaction with a company. In order to join the scheme a company must agree to sign up to the code of conduct for house buyers which includes a provision for a complaints procedure along with agreement to follow best practice guidelines.

TPOS Registration Data:

Regional Companies: 61.11% were not TPOS registered, while 38.89% are.
National Companies: 47.69% are not TPOS registered, while 52.31% are.

Key Takeaway:

Another tick for National house buying companies as they are more likely to be TPOS registered compared to regional companies although the proportion at just over 50% is still very low. Luckily it is easy to check if a company is a registered member of TPOS by using the ‘find a member’ feature on the TPOS website.

Expert Insight

“While it is unsurprising to see fewer regional house buyers being registered with the property ombudsman what is more concerning is that only 50% if the national companies were, TPOS membership should be a minimum requirement for all professional house buying companies.”

Kelvin Elliott, Cash Sales Expert

How many are members of the National Association Of Property Buyers (NAPB)

The National Association of Property Buyers (NAPB) is a trade association formed in response to an office of fair trading report into the practices of house buying companies and aims to promote high standards in the quick house sale industry. Although the barrier to entry for joining is fairly low membership does, in theory, mean that a company is TPOS registered and has shown some commitment to being held accountable to higher standards.

NAPB Membership Data:

Regional Companies: 88.89% are not NAPB members, while only 11.11% are.
National Companies: 49.23% are not NAPB members, while 50.77% are.

Key Takeaway:

National house buying companies are much more likely to be NAPB members compared to their regional counterparts. There is no procedural reason why this should be the case since NAPB membership is open to all house buying companies. You can check if a company is registered with the NAPB by checking the membership page on the NAPB website.

Customer Reviews

A good place to start when deciding to use any service is to check the companies reviews. It is best to look for independently verified reviews on platforms such as Google reviews and Trustpilot.

In our study only 5% of reviews for regional companies mentioned ‘bad practices’ (practices that are against the TPOS code of conduct) compared to almost 30% for national companies. There is a caveat to this however.

With the regional buyers being much smaller so is the number of reviews in fact over 50% of the regional companies in our study had no reviews at all and the ones that did had a very small number so this data can be taken with a pinch of salt and more or less ignored.

Results

Conclusion

From this data set it is clear that you are much more likely to find a genuine house buying company registered with trade bodies and associations by going with a national house buying company.

That said, this study only highlights the broad differences and of course there will be regional companies that are genuine and deliver a good service to their customers and national buyers that don’t. With this in mind it is always advisable to carry out your own due diligence before getting an offer from a cash house buying company.

For guidance on how to find the best cash house buying company you can read our article ‘the best house buying companies’.

To get an idea of what an offer from a house buying company would look like for you use our ‘cash offer calculator’ by clicking the button above.

Cash Offer Calculator

byAlistair Nash/PublishedMay 27, 2024 11:30 am/UpdatedJune 9, 2024

Written By: Alistair Nash

Alistair Nash is a co-founder at Cash House Buyer Guru and a seasoned property market analyst. With a strong background in data analysis and real estate, Alistair brings a unique perspective to simplifying complex real estate problems. His insights are focused on providing clear, actionable advice for homeowners looking to navigate the cash sale process effectively.

New study reveals the truth about regional house buying companies

Understanding the House Buying Company market

The study

How many are actually registered companies

Registered Companies Data:

Key Takeaway:

How many are registered with The Property Ombudsman (TPOS)

TPOS Registration Data:

Key Takeaway:

Expert Insight

How many are members of the National Association Of Property Buyers (NAPB)

NAPB Membership Data:

Key Takeaway:

Customer Reviews

Results

Conclusion

“Nothing is so fatiguing as the eternal hanging on of an uncompleted house sale”

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