One in three sales fall through as market returns to ‘familiar conditions’

One in three property sales in England and Wales fell through before completion in the final quarter of 2021 as the market returned to near normal.

Some 34% of property sales fell through before completion in the final three months of last year, up from 11% in Q3 2021, according to new data from Quick Move Now.#

Danny Luke, from Quick Move Now, said: “In the third quarter of 2021, just 11% of property sales fell through before completion. This figure was significantly lower than usual and can be attributed to strong demand and a shortage of properties on the market. Buyers were keen to push their purchase through before the end of the stamp duty holiday and were also acutely aware that, should the sale fall through, their options for other properties would be incredibly limited.

“In the final quarter of 2021, the fall through rate returned to a far more usual figure of 34%. I would suggest that this indicates that the market is settling down and returning to more familiar conditions, albeit at lower volumes than we have previously experienced.”

Some 50% of fall throughs happened because the buyer changed mind or attempted to renegotiate their offer; 28% failed failed due to gazumping.

Luke continued: “The competition for properties was well documented last year and, as such, buyers felt under significant pressure to make an attractive offer in a very quick timescale if they wanted any chance of securing the property. Buyers had little option but to be impulsive with their offers.

“Once the adrenaline and excitement of competing to get their offer accepted subsided, the pressure eased a bit and buyers had the chance to think more rationally about their purchase. Was this really the property for them? Was it really worth the price they had agreed?”

Why property sales failed in Q4 2021

Reason Percentage of failed sales
Buyer changed mind or attempted to renegotiate their offer 50%
Seller accepted higher offer from different buyer or switched to a new buyer due to slow progress 28%
Survey issues or difficulty securing mortgage 14%
Chain break 8%

Annually, the fall through figures communicate a very similar message. Throughout the whole of 2021 Quick Move Now saw 30% of property sales fail before completion. Some 39% of those failed sales were attributed to the buyer changing their mind or trying to renegotiate their offer after the sale had been agreed.

2021 annual property sale fall through figures

Reason Percentage of failed sales
Buyer changed mind or attempted to renegotiate their offer 39%
Seller accepted higher offer from different buyer or switched to a new buyer due to slow progress 27%
Survey issues or difficulty securing mortgage 27%
Chain break 4%
Other 3%

Luke added: “2021 was a very high-pressured year for the property market. Demand far outstripped supply and things were moving at an exceptional speed as buyers and sellers raced to beat the stamp duty holiday deadline.

“The reasons for failed sales offer a clear narrative of buyers under pressure who, in the cold light of day, questioned the wisdom of their purchase and the price they were required to pay to secure a property, alongside a buoyant market that had an abundance of buyers ready to step in should you be unwilling or unable to complete the purchase quickly and for top price.

“The continued shortage of properties for sale means that prices aren’t likely to fall drastically any time soon, but we have already started to see a slight cooling and calming of the market. Until there is a greater level of stock available, those without a strong need to move are likely to hold tight until they have a greater number of options, so I would expect sale volumes to stay fairly low, certainly for the first half of the year.”

 

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2 Comments

  1. PeeBee

    The above figures simply do not compute.  In the whole of Q4, supposedly, 50% of sales “fell through” because the buyer walked away – yet only 8% of property sale chains suffered a break.  And no sales whatsoever collapsed due to a vendor changing their mind about selling.  Not one?
     
    Similarly, their ‘whole year’ numbers do not stack up when crunched.
     
    But so what?  No-one is going to do anything about it.  And someone will always print it so it will hang in the air like the bad smell it is.
     
    “Quick Sale” companies such as this one rely on creating a ‘fear factor’ to generate their business.  They do not know the figurees – they cannot.  It is information that is not available.
     
    Smoke and mirrors emanating from what some might refer to as a seedy corner of our industry.

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    1. AcornsRNuts

      Agreed. It does not show the full picture. For example I put my house on the market in November 2020 and agreed a sale within a month. By March I was growing tired of the seemingly endless queries and the lack of a firm mortgage offer so instructed the agent to remarket. A new purchaser offered above the agreed price and, since the original purchaser was apparently ready to exchange, gave them first option to increase their offer. Their mortgage company dragged their feet yet again so I exchanged and completed with the new buyer before the end of June 2021.

      Does that come under “Seller accepted higher offer from different buyer or switched to a new buyer due to slow progress” or “Survey issues or difficulty securing mortgage” or even both?

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