Big drop in fall throughs but quarter of property deals still don’t make it
Stats from Quick Move Now reveal how agents are working hard to keep their pipelines intact, although caution is now the market watchword.
Total number of fall throughs saw a big drop in the second quarter, although nearly a quarter of sales still never made it to completion.
A shocking 55.8% of property deals failed in the first three months of this year, but this was down to less than 25% between April and June, according to new figures from Quick Move Now.
Of the sales that failed in the second quarter, half fell through because the buyer changed their mind and withdrew.
A further quarter fell through because the buyer was unable to get a mortgage, or because their mortgage product was withdrawn and replaced with a more expensive alternative.
The remaining 25% of failed property sales were attributed to chain-break or the seller withdrawing from the sale.
Lowest
Danny Luke, MD at Quick Move Now, says: “The current fall through rate is the lowest we’ve seen in almost two years, which is good news for those hoping to buy or sell.
“With the level of economic uncertainty seen over the last 3 months, it’s little surprise that the most common reason for failed property sales during that period was the buyer changing their mind and pulling out of the sale.
Even would-be buyers who can afford to move are being cautious.”
“Many are concerned about how high interest rates will go and what impact further rises will have on property prices.
Many potential buyers are adopting a ‘wait and see’ approach, he says.
“Where property sales are going ahead, estate agents are doing everything they possibly can to keep chains together, knowing that a new sale is likely to be difficult and time-consuming to tie up.”
Fall-throughs at their lowest since pre-pandemic boom
That is why the result from 4Corners trial of zero fall throughs from those buyers who paid for their searches at the point of sale is significant. The trial will be widened shortly.
Cancellation rate is still bumping around 28%, possibly QuickMove who are a home buying business have skewed data as they are not an agency in the UK residential market, they tend to buy distressed property assets, rather than cover the whole of the market. Having sight of many agency pipelines it is clear that whatever the market typically a little under one in three agreed sales, does not get to exchange – whatever the market. Whilst private treaty may be the reason behind this, so you are not going to iron out this wrinkle, the ‘speed’ of exchanges certainly can be turbo-charged if operations and technology are changed across the industry, which eases cash flow situations in declining house sale markets.