In the past month property fall through rates have increased by 45 per cent.
Between February 17 and March 16, the number of aborted property sales has increased from 5,114 to 8,364, according to a recent client briefing from TwentyCi.
Unfortunately, this figure is expected to rise unless the government suspend activity in the sector until restrictions concerning social distancing are lifted.
The report also found new instructions and sales agreed to be significantly down in the last week. At the end of February, new instruction levels reached a 2020 high with 36,435 new properties entering the market. However, by March 16, this figure had fallen to 29,328.
Similarly, in the space of a week the volume of property moving to sales agreed status decreased by 16 per cent. At the end of February, 29,482 properties had agreed sales, but this had fallen to 22,997 by March 16.
According to Twenty7Tec’s ‘daily mortgage statistics’ for Thursday March 26, mortgage documents prepared (10.49 per cent) and search volumes (8.37 per cent) were up on Wednesday’s totals.
However on a weekly and fortnightly basis, numbers continue to fall. Following governmental advice and lender reluctance, the market is likely to continue shrinking in the weeks ahead.
Compared with the same time last week, searches were down 23.72 per cent, documents prepared had fallen by 10.49 per cent and the value of loans had dropped by 16.3 per cent.
Figures on a fortnightly basis had picked up slightly from Wednesday’s figures with searches down 26.45 per cent, documents prepared falling by 13.3 per cent and the value of loans dropping by 15.68 per cent.
James Tucker, CEO of mortgage technology provider Twenty7Tec says:
“Even yesterday’s figures look out of date with the Government having prevented sellers having any prospective buyers view the property. The Government has also requested that ‘Homebuyers and renters should, where possible, delay moving to a new house while measures are in place to fight’ the virus.”
“Finally, it has asked lenders to extend all house purchase loan offers by three months to give borrowers more time to complete transactions. Some lenders – including Virgin and Skipton – have suspended all new purchase applications.
“Ironically, yesterday the figures bounced back from what has been a challenging week – with a rise of over 8% of searches for all mortgages. This was driven by a lift in both purchase and remortgages, with purchase searches forming 41% of the market yesterday.
“The market is going to face some incredibly tough conditions over the next few weeks. The shift of brokers’ attention to remortgages is clearly going to be where they can keep doing strong daily volumes. In light of the broader economic picture, we wouldn’t be surprised if there were more equity release-style applications as households look to firm up their immediate financial needs.
“With increased levels of innovation on the technology front, including greater use of ID checking and virtual and video tours of properties, we think that it will be possible to sustain some activity even in light of the boundaries that Government has put in place. That said, it would be foolish to think that the purchase market volumes would not decline further over coming days.”
One Response
Yes the volume will decrease in light of the current climate.
The banks removing all mortgage products for new lending is going to put a dampener on the industry that props up so many 3rd party related industries and the ripple effect is going to be wide spread.
But why do we have to see this? If the mortgage products are removed, can people still apply for the DIP via the mortgage advisors? i feel this may be impacted greater through the 80% furlough agreements in place but there are still lots of buyers and lots of seller.
Thinking outside the box is needed here. We can still process part of the instruction, we can accept offers, produce Memo of Sales, still order searches (i would suggest doing this when your offer is accepted and not wait for the solicitor), still raise enquiries and move this to a ‘soft exchange’.
Once the market then starts moving again we only need the mortgage offer and valuation in order to complete.
Lets look at ways to fix this and not at ways to limit our creativity