Yahoo Movies Five most common problems of why UK property purchases fall through
As the stamp duty holiday deadline fast approaches, one in four buyers could fall prey to a sale fall-through.
According to property platform WiggyWam, a quarter of house sales fall through every year in the UK – an estimated 225,000. This costs UK home-buyers £607m ($830m) every year, and that figure could be even higher.
Thanks to the stamp duty holiday the property market has seen increased demand, however this has caused long conveyancing delays which could see prospective buyers miss the holiday deadline and be forced to pull out of the sale.
READ MORE: UK property sales poised to fall off a cliff if buyers miss stamp duty holiday deadline
WiggyWam CEO, Silas J Lees, said: “Agents don’t get paid until a sale completes, so these fall-through statistics hide within them a vast unseen cost for agents.
“Aborted sales can be disastrous to the agent pipeline and in meeting monthly overheads.
“For buyers and sellers, the risk of a transaction falling through, together with the associated abortive costs, is a major obstacle which stops many from moving in the first place.
“There needs to be a push in the market; a move towards more transparent and efficient processes. It’s the only way for fall-through rates to significantly drop.”
The top five reasons why property sales fall through
Difficulties with the mortgage. If a buyer’s mortgage offer expires or is changed, or if the mortgage lender values the property lower than the agreed sale price this can cause the sale to collapse.
Delays in the legal process. Conveyancing delays can lead to a buyer or seller losing patience or changing their mind.
A home survey discovers problems with the property. If the problem is expensive to remedy that can put buyers off and cause the sale to fall-through.
Gazumping, in other words, when a seller agrees to a higher offer from another buyer after having already accepted the first buyer’s offer. Although illegal in Scotland, this can affect property sales throughout England and Wales.
If a property sale is part of a chain. In a property chain the sale of one property depends on the sale of the other properties and vice versa. It only takes one property to have a problem and all the property purchases could fall through.
READ MORE: Lower borrowing costs making longer-term fixed rate UK mortgage deals more appealing
Fall-through costs are the non-reimbursable fees the buyer has already paid, including conveyancing fees, survey costs and mortgage arrangements.
Conveyancing fees can be costly – often exceeding £1,000 – so every time a property sale falls through it costs the average home-buyer £2,700.
Watch: Why are house prices rising during a recession?
