Fall through fear
Fall-throughs and aborted sales are costing UK homebuyers £607 million every year, a number which many predict will rise even further as the stamp duty holiday (SDLT) deadline inevitably arrives.
Fears for an increase in fall throughs are growing and can cause additional stress not only for vendors and buyers, but also for conveyancers who are juggling large caseloads, trying to progress as many transactions through as possible before the SDLT holiday deadline lapses, whilst facing logjams in the pipeline.
WiggyWam, the all in one property platform, has revealed that there are an average of 225,000 fall-throughs in the UK residential property market each year. This means 1-in-4 UK sales fall-through with each one of them costing homebuyers an average of £2,700.
Zoopla’s latest figures suggest 70,000 transactions are likely to miss the stamp duty holiday deadline of March 31.
The property portal has commented:
“The case is growing for a short, month long extension to help buyers who agreed a sale in 2020, and secure the expected savings.”
“The more buyers rely on securing savings, the greater risk of a spike in sales falling through, with a knock-on impact for whole chains of sales. If an extension fails to materialise, buyers across some chains may help to fund stamp duty costs for others in the chain to safeguard completions” says the portal’s report on the market.”
Due to the logjams in the pipeline, fall-throughs are expected to happen for a number of different factors including:
- Mortgage problems: sales can often fall-through when a buyer’s mortgage offer expires or is altered due to a change in circumstance. Down-valuation, when mortgage lenders value a property lower than the buyer has agreed to pay, can also lead to sales falling apart.
- Problems revealed in survey: A home survey can reveal any number of problems with a property, the more expensive of which can cause a sale to fall-through.
- Gazumping: When the seller accepts a higher offer from a second buyer after they have already agreed to sell to the first buyer.
- Conveyancing delays: The legal processes of homebuying can take a long time. Delays can cause buyers to lose patience or change their mind and drop out of the sale.
- Broken chains: If a sale is part of a chain – where its success is entirely dependent on the successful sale of other properties – it is vulnerable to all of the above issues, multiplied by however many properties are in the chain. Only one chain property needs to experience one of the above issues to cause multiple different fall-through.
Have you experienced any sales falling through as a result of the current situation?