Property fall throughs costing home sellers £788m

Journalist: Samantha Downes, Currently at the I (business editing some Sundays (freelance) and Mortgage Solutions

ended 09. June 2022

Previous research by HBB Solutions found that in 2021, 326,000 property sales collapsed, costing UK homesellers £880.5m. This figure had been increasing throughout the pandemic, up from 272,768 fall-throughs in 2019. 

 However, the latest figures show early signs that this negative market trend may be starting to subside. 

Looking for comment - is it looking to subside? And is it a pandemic blip?



 

4 responses from the Newspage community

Fall-throughs are a permanent feature of the property market. However, it's likely to subside as the market calms down and hopefully returns to a little more normality.
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According to HM Revenue & Customs data, the volume of property sales appears to have increased by approximately 16% in 2021. Therefore any reduction in fall-throughs is more profound in relative terms. This may be a result of fewer down valuations. Historical data does not keep up with buyer sentiment when house prices increase dramatically. Stamp duty holidays, lack of housing supply, demand for outdoor space and record low mortgage rates led to rapidly increasing asking prices. Valuers may have taken a more sombre view and applied down valuations, scuppering mortgage applications reliant on meeting loan-to-value threshold requirements. Pandemic mortgage lending restrictions have also eased for self-employed borrowers, and there is a willingness to use variable bonuses or commission income and available loan to values.
The key issues driving up the rate of property sales collapsing in 2021 was rapidly increasing property prices, and poor conveyancing. During the pandemic, conveyancing services levels dropped through the floor, partly due to high volume in the sector, partly due to mismanagement, namely firms taking on more work than they had capacity for, poor systems and poor processes. This resulted in the legal process of buying a house taking far longer than it should. Impatient sellers, combined with rapidly increasing property values, felt they could achieve a higher sale price by going back to market, resulting in many sales falling apart. Now property growth is showing some slow down we expect stabilisation, as sellers are less likely to pull out a deal to achieve a higher sale price.
It is not a new thing, however it has been highlighted during the recent busy months in the market. The big problem is chains and lack of preparation. So many people we see as brokers come to us after they have had an offer accepted on a property to “see” if they can get a mortgage. Many can’t or lack the affordability to get the property they want. Others fall short of the “chain” and are let down by another link. It is about time that more emphasis is placed on the buyer, as the ability to pull out of a transaction just days before completion is unfair and can be very costly to sellers.