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Quick Move Now Fall Through Index

Friday, 5 September 2008

Aborted Sales Still Over 40%

On average 44% of sales aborted during the last 6 months. This means the Quick Move FTI has been running at over 40% for the last 12 months.

The index shows a slight improvement, of just 1%, this month. However this still means that nearly 1 in 2 agreed sales never actually complete, this is roughly double the rate of the same time 2 years ago.

We still don’t envisage any short term improvement in the market. And expect the volume of aborted sales to remain high for the following reasons:

• Buyers with secure finance will remain in the hot seat. And will “gazunder” and freely swap between properties if a better deal becomes available.

• Buyers in shaky or incomplete sales chains will struggle to complete on agreed sales.

• Buyers with questionable finances or small deposits will struggle to agree suitable mortgage deals.

Some good news is that the government has made its mind up about stamp duty. And while there may be re-negotiation on sales previously agreed just above the new stamp duty level of £175,000, hopefully it will give a much needed boost to the bottom end of the market. For months lenders have been asking for larger deposits and if buyers don’t need to pay stamp they can put an extra £1,250 to £1,750 towards their deposit.

The main issue with the property market remains the credit crisis and the associated lack of mortgage finance. Until these issues are resolved and buyers can gain access to cheap mortgages with more reasonable deposit levels the market is likely to remain depressed.

Obviously the current conditions could go on for months, if not years. So what do you do if you need to sell and are lucky enough to find a buyer?

• Get as much information about the sale chain as possible, before agreeing to the offer

• Push for early exchange of contracts which should give you and the rest of the chain at least some certainty

• Keep in contact with your estate agent and solicitors. If things go quiet there may be a problem-so chase regularly.

• Don’t waste time on a chain that isn’t going anywhere. Get back on the market and find a better buyer