Growing caution sees forty percent of property sales falling through before completion
Forty percent of property sales fell through before completion in the third quarter of the year, according to new figures from Quick Move Now.
Of the sales that collapsed, 41 percent failed due to buyers changing their mind about the purchase and a further 24 percent failed when the buyer was unable to get a mortgage. This suggests growing caution from both buyers and lenders.
Danny Luke, Quick Move Now’s managing director, said:
“It’s concerning to see that the number of property sales falling through before completion seems to be on the rise again. It is, however, not a huge surprise given the current turmoil in our economy.
It’s been well documented that measures to boost the property market after Covid, alongside a shortage of stock, led to an overheated market and steep rises in property prices. It would be naive to think that the economic climate we now find ourselves in would not heavily impact the confidence of both buyers and mortgage lenders. Rising inflation and interest rates will have a huge impact on affordability, and anxiety is rising rapidly. Just last week we witnessed the removal of 40 percent of mortgage products from the market and a growing number of predictions of a crash. It’s little surprise that the biggest causes of failed property sales in the last three months have been buyers changing their minds and difficulty securing mortgage finance. Sadly, I would expect this pattern to continue throughout the final quarter of this year and well into 2023. The government recently announced another stamp duty reduction in a bid to keep the market going, but in reality any saving made on stamp duty will be wiped out by the rise in interest rates for those requiring a mortgage.”
Reasons for failed property sales in the third quarter of this year:
- Buyer changed their mind about the property (41% of failed sales)
- Difficulty getting a mortgage (24% of failed sales)
- Buyer or seller pulled out of sale due to slow progress (18% of failed sales)
- Buyer pulled out of sale after issues identified in property survey (12% of failed sales)
- Other (5% of failed sales)
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If your sale has recently fallen through, our guide What to do if your house sale falls through offers some great advice on your options.