More than one in four property sales fell through in England and Wales between July and September this year, according to new figures.
Property company Quick Move Now suggests 29% of property sales fell through before completion in the third quarter of this year. With each failed sale costing an estimated £3,370, the company estimates that failed sales could cost the public as much as £900 million each year.
So why are so many sales falling through before completion?
The main cause of unsuccessful property sales during the last three months has been the buyer having difficulty securing a mortgage. This accounted for 40% of collapsed sales.
A further 27% of failed property sales were caused by the buyer changing their mind or unsuccessfully attempting to renegotiate the agreed sale price. The remaining lost sales were attributed to chain break (14%), gazumping (12%) and survey issues (7%).
Quick Move Now’s managing director, Danny Luke, commented: “Whilst the latest fall-through rate is 2% higher than the same quarter last year, it is 10% lower than the third quarter of 2022 and significantly lower than the peak we saw in Q1 2023. This demonstrates how much the market has settled after the economic uncertainty of the last few years.
Volumes
“People may be surprised by the high number of property sales impacted by difficulty securing a mortgage, but there is good reason for it. When sales volumes were lower, only those in a very strong financial position were moving. Higher mortgage interest rates meant much of the market was being driven by cash purchases. Now mortgage interest rates have started to fall, and sales volume is beginning to increase, a greater number of sales are reliant on mortgages.
“Many existing homeowners who are considering moving are unaware of how much higher interest rates and cost of living will impact their mortgage affordability assessments. We’re also seeing lenders exercise more caution when approving mortgages. Although the economy is picking up, and there is a lot more optimism in the market, lenders are vigilant to several external factors that have the potential to impact future inflation and buyer affordability, such as current foreign political uncertainty and global conflicts.”
See also: From Stamp Duty to Conveyancing – How House Buying is Changing
