There has been a sharp rise in residential property sales falling through before completion, owed largely to uneasy market conditions, according to Quick Move Now.
The home buying company’s latest data reveals that 40% of property sales fell through during Q3, down from a fall-through rate of 31% in Q2. This figure marks a 9% increase in failed sales over the last three months.Of the sales that collapsed, 41 percent failed due to buyers changing their mind about the purchase and a further 24 percent failed when the buyer was unable to get a mortgage. This suggests growing caution from both buyers and lenders.Danny Luke, Quick Move Now’s managing director, said: “It’s concerning to see that the number of property sales falling through before completion seems to be on the rise again. It is, however, not a huge surprise given the current turmoil in our economy.
“It’s been well documented that measures to boost the property market after Covid, alongside a shortage of stock, led to an overheated market and steep rises in property prices. It would be naïve to think that the economic climate we now find ourselves in would not heavily impact the confidence of both buyers and mortgage lenders.
“Rising inflation and interest rates will have a huge impact on affordability, and anxiety is rising rapidly. Just last week we witnessed the removal of 40 percent of mortgage products from the market and saw a growing number of predictions of a crash.
“It’s little surprise that the biggest causes of failed property sales in the last three months have been buyers changing their minds and difficulty securing mortgage finance. Sadly, I would expect this pattern to continue throughout the final quarter of this year and well into 2023.“The government recently announced another stamp duty reduction in a bid to keep the market going, but in reality any saving made on stamp duty will be wiped out by the rise in interest rates for those requiring a mortgage.”
| Reason for failed property sales |
Percentage of failed sales |
| Buyer changed their mind about the property and pulled out of sale |
41% |
| Difficulty getting a mortgage |
24% |
| Buyer or seller pulled out of sale due to slow progress |
18% |
| Buyer pulled out of sale after issues identified in property survey |
12% |
| Other |
5% |
|
|
|
|
There has been a sharp rise in residential property sales falling through before completion, owed largely to uneasy market conditions, according to Quick Move Now.
Look at the figures from another angle (assuming they are correct) and;30% of those fall throughs may have been avoided buy upfront information/better communication and or use of tech to speed the process up24% may have been saved by more rigorous financial due diligence at point of agreeeing sale.41% may have been saved by making sales binding at a point nearer when it was agreedThe market will do what the market does but there is still so much that can be done to improve the way our system works.Because the frank reality is that what we call ‘fall throughs’ and put into % are actually peoples life plans changing
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Totally agree, but the conveyancing industry dies not appear to want to change.
Why does it need to be a confrontational system with two sides?
Why not just have one solicitor acting, paid for by both parties? We are so often told that a purchaser solicitor is effectively acting for the mortgage company anyway.
With a few more relatively minor record keeping changes at the land registry, over night we have doubled the conveyancing capacity!!
Please tell me why something a long these lines is not possible?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Oh, we do want change. Less red tape and bureaucracy, PII issues, lender issues, quicker HMLR registrations. A more straightforward SDLT system. Better fees, lower referral fees. To name only a few reasons.
We need two conveyancers and it is, at times confrontational, because of possible conflicts of interest. Some sellers have been known to mislead, re neighbour disputes, Japanese Knotweed, second charges (they probably didn’t know exist). In fact, a whole host of reasons.
I’ll leave you to sort HMLR:)
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register