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Quick Move Now Fall Through Index

Thursday, 9 October 2008

Aborted Sales Remain Over 40%

On average 41% of sales aborted during the last 6 months.

Due to struggling financial markets and an economic slowdown the sale fall through index has been running at over 40% for 13 consecutive months. The biggest issue affecting both the economy and volume of aborted sales is confidence. Unless confidence in bricks and mortar can be rebuilt we aren’t going to see an improvement in the property market or fall through rate.

In recent days governments in the UK and elsewhere have attempted to stabilise struggling world financial markets. No one really knows how this massive experiment will end but at least it represents a large scale, synchronised attempt by the world’s governments to halt failing markets.

Whatever happens we aren’t going to see a rapid turnaround in the fortunes of the property market. Even if liquidity returns to financial markets banks will not be offering the high risk, low equity mortgages they once did. With large numbers of buyers struggling to secure mortgages, the level of fall throughs will remain high and the market will remain depressed until real confidence returns to the wider economy.

World governments have little left in their armoury, if recent interventions fail we are likely to enter the severest depression in a lifetime. A world recession wouldn’t really benefit anyone so fingers crossed for the next few months.