The latest industry index on property fall throughs by property purchasing specialist, House Buyer Bureau, has revealed that the number of property transactions estimated to have been subject to collapse across the UK market has started to climb after two quarters in which numbers were reducing.
House Buyer Bureau analyses the number of transaction fall throughs across the UK property market, what this means in terms of the average cost of a fall through and what the total cost to the property market is as a result.
The latest index shows that the average cost of a fall-through during the second quarter of 2023 was £3,394, up from £3,355 in Q1.
At the same time, the estimated number of transactions that fell-through in Q2 hit 69,940, a 10.2% increase on the previous quarter.
As such, the total cost to buyers and sellers of fall-throughs in Q2 was an estimated £237.4 million. This marks a quarterly increase of 11.5% compared to the Q1 total of £212.9 million.
While the quarterly picture is disappointing, it’s important to note that current fall-through rates are still lower than they were this time last year.
The number of failed transactions is currently -10.4% lower than a year ago, while the total cost of fall-throughs is -5.9% lower.
Managing Director of House Buyer Bureau, Chris Hodgkinson said, “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.”