At Austin Property Services, we work hard to help clients move homes, but it can be a challenging activity.
External factors place pressure on buyers and vendors, and it is no surprise to see deals collapsing. However, the figures for deals collapsing in the third quarter of 2020 will be alarming for many people.
According to a study conducted on behalf of Quick Move Now, 53% of property deals in England and Wales collapsed in the third quarter of 2020. The same study indicates there was an annual fall through of 43%.
For 2020, the five most commonly associated reasons for property sales falling through were:
Buyer changed their mind and pulled out of the sale (31%)
Buyer unable to secure a mortgage (15%)
Buyer or seller pulled out of the sale due to slow progress (13%)
Buyer attempted to renegotiate the agreed sale price (11%)
Buyer pulled out of the sale after a property survey (11%)
Danny Luke, Quick Move Now’s managing director, commented:
“It’s a word that has been bandied about a lot in 2020, but this year really has been unprecedented. Although not officially shut down, the UK property market effectively ground to a halt for almost a quarter of the year. Government measures, such as the furlough scheme and the stamp duty holiday, managed to avoid the much-anticipated price crash, but there is still considerable caution about what lies ahead.”
Danny continued by saying; “The first half of the year was consumed by uncertainty. 46 percent of sales that failed during the first half of the year did so either because the buyer changed their mind or because they had a change in circumstances. There was a huge amount of uncertainty about the pandemic and the impact it would have on property prices, as many experts began predicting an imminent price crash. People also became increasingly concerned about the security of their jobs.”
Danny also said; “Once the property market started moving again, government stamp duty measures provided a much-needed boost. We saw buyers and sellers return to the market quickly and enthusiastically. It was at this point, however, that we began to see the economic impact on lenders. 27 percent of failed sales in the third quarter collapsed as a result of the buyer being refused lending. A further 27 percent were attributed to the buyer pulling out of the sale after a property survey, and tales of mortgage lender caution and down-valuing properties at the point of survey were rife across the market.”
There is no denying the end of 2020 saw many prospective buyers rushing property deals to ensure they qualified for the stamp duty saving. Danny Luke spoke about this, by saying;
“During the final quarter of the year we have felt the force of the looming stamp duty holiday deadline of 31st March, as buyers race to get the sale completed in time. Only 17 percent of property sales fell through before completion in the final quarter, which is an exceptionally low rate by usual standards.”
Danny concluded by saying; “In terms of what 2021 holds for the property market, ‘uncertainty’ is the buzzword. It largely depends on what happens in the Spring, when both the stamp duty measures and furlough scheme are due to come to an end. We also have the added economic pressure of the Brexit transition period coming to an end on 31st December, and few are able to predict, with confidence, the impact that move will have on jobs, finances and the property market.”