More than a quarter of property sales fell through before completion in Q3, according to new figures.
Data from Quick Move Now reveals that 27% of property sales in England and Wales collapsed between July and September.
Of the sales that fell through, 58% were attributed to a change in the buyer’s circumstances or the buyer changing their mind and withdrawing their offer.
Exactly a quarter of failed sales were caused by a chain-break, and a further 8% collapsed due to difficulty securing a mortgage. The remaining failed sales were attributed to the seller pulling out to accept a higher offer from a different buyer.
Danny Luke, MD at Quick Move Now, says: “When you look at what’s happened to mortgage interest rates over the last few months, it’s little surprise that the biggest cause of failed property sales is the buyer experiencing a change in circumstances or getting cold feet.
“Many of those who made offers on properties in the second quarter, basing their budget on mortgage interest rates of below 5%, will have found that rates were more than 1.5% higher by the time their mortgage application was submitted.
He says mortgage rate fluctuation was also reflected in the 8.3% of failed sales that were caused by difficulty getting a mortgage.
These fall throughs have a knock-on effect on related sales”.
“These fall throughs have a knock-on effect on related sales and purchases, meaning chain-break also remains a challenge for the property market,” he says.
“In a slower property market, when one sale falls through, there is less hope of a new sale being tied up in time to keep a property chain together.”