Property transactions experiencing fall-throughs have seen a surge, as disclosed by a recent analysis by the House Buyer Bureau, causing concern amongst buyers and sellers in the UK property market. This examination took into account the average cost of a fall-through and the cumulative effect it has on the property market.
The latest data reveals a noticeable rise in the average cost of a fall-through during Q2 2023, standing at £3,394, a slight increase from £3,355 in Q1. Simultaneously, the estimated number of transactions experiencing fall-throughs in Q2 reached 69,940, marking a 10.2% increase from the previous quarter. Consequently, the total estimated cost that fall-throughs posed to buyers and sellers in Q2 was approximately £237.4 million, rising 11.5% compared to the Q1 total of £212.9 million.
Notably, despite this increase, the current fall-through rates are lesser compared to the same period last year. The number of unsuccessful transactions is currently 10.4% lower than a year ago, and the total cost is 5.9% lower.
Chris Hodgkinson, MD of House Buyer Bureau, stated, “It was more or less inevitable that fall-throughs were due to climb this year and this increase has come at a considerable cost to the nation’s buyers and sellers at a time when finances are already stretched to breaking point.
The market may have cooled in terms of transactional volumes, which has led to a reduction in fall throughs on an annual basis when compared to the heights of the pandemic boom. However, current market conditions are uncertain, to say the least, and many buyers have struggled with the increasing cost of borrowing which has forced them to reassess their position within the market.
This has been a driving force behind the recent uptick in sales collapsing during the second quarter of the year and the best way to bypass this property disappointment is to secure a cash buyer as the dangers of a fall through are dramatically reduced. This is easier said than done though, as our recent research found they have accounted for just 31% of sales across Britain in the last year.
The good news is, that with the Bank of England finally choosing to freeze rates last week, we should see a greater degree of stability return to the market during the closing stages of this year.”