Number of house sales failing before completion drops
Date online: 07/04/2016
According to the figures, the house sale fall through rate of 20% was a drop of around 8% from the reported 27.94% in the last quarter of 2015.
Further analysis showed the year-to-date fall through rate remained fairly constant throughout 2015 and into the start of 2016, at around 29%, and finished the first quarter of 2016 at 29.07%.
Danny Luke, Business Manager at Quick Move Now, commented: “The start of 2016 has been an interesting time for the UK property market. Strong demand and low supply in many areas has led to a strong financial performance , and whilst it is encouraging to see that the number of sales falling through before completion fell in the first three months of 2016, many property owners and would-be buyers would still be shocked to learn that one in five sales doesn’t go through.
The two biggest reasons why house sales didn’t complete in the first quarter of 2016 were the vendor pulling out of the sale for a higher offer (25 percent) and either vendor or buyer pulling out because they felt the sale wasn’t progressing quickly enough (25 percent), which is unsurprising in the current market.
With many areas experiencing very strong demand and low supply, vendors are keen to achieve the best possible price for their property so are willing to pull out of an agreed sale if made a better offer. Other reasons included the buyer changing their mind (18.75 percent), buyer being refused lending by a mortgage provider (12.5 percent), chain collapse (6.25 percent), survey issues (6.25 percent) and buyer wanting to renegotiate after the initial offer had been accepted (6.25 percent).
A lack of properties coming to market has led to prospective buyers having to move very quickly in order to secure a property, and may mean they put an offer in on a less than ideal property due to fear that they’ll be unable to find anything else, which accounts for buyers changing their minds and trying to renegotiate after the initial offer has been accepted – a collective figure of 25 percent. Some inevitably get cold feet about such a large investment, or find that a survey confirms their fears, and pull out before the sale completes.”