Whilst UK property prices are dropping, it seems that the hopes of buyers are being let down, too. 2018 saw a record number of house sales fall through and the problem could continue into 2019.
According to Property Wire and stats from Quick Move Now, the percentage of house sales falling through before completion was at 34.9% in 2017. In 2018, however, this figure went up to 38.8%. It’s shocking when you look at the data, really. Over ten years since the data was collected in 2008, 2018 is the highest year for property sales falling through.
Why is this such a problem?
Ultimately, a multitude of factors affects the property market. Whether its house prices, mortgage acceptance or sale completions, you have to look across the board for the reasons as to why the numbers change. In 2018 specifically, there are many uncertainties with the economy, political climate and of course, the usual seasonal changes in property market growth. However, it appears that a huge reason for house sales falling through is buyers simply changing their mind.
Back in May, this BBC article reported on the problem, suggesting that ‘indecisive buyers’ were to blame for the increase in fall-throughs. It’s certainly an increasing problem and one that we can’t ignore. Why do people change their mind? Well, there are a few reasons: they’ve found a different property, they’re unsure about their finances or they simply don’t want to wait to be a part of the sale anymore, perhaps due to impatience.
The cost of a sale falling through
Reasons aside, there’s no denying that a house sale falling through is a distressing situation – both financially and emotionally. According to Which, prospective buyers lose £2,899 on average. This is a huge sum of money to lose out on, especially when you’ve just lost your dream home, too. Even worse, 5% of people surveyed by Which apparently lost over £5,000. Back in 2016, the HM Treasury Budget reported that house sales falling through cost the nation around £270 million. And the emotional cost of losing a home goes without saying.
Are house sales falling through the only problem sellers and buyers face?
Unfortunately not. House sales falling through can sometimes be out of anyone’s control – but not gazumping, gazundering and gazanging. These problematic circumstances can be upsetting for those involved and often put people in awkward situations. And they can often result in a property sale failing to complete. In the UK, gazumping, gazanging and gazundering are on the rise too, along with house sales falling through.
What is ‘gazumping’, ‘gazanging’ and ‘gazundering’?
Simply, one is done by the seller and negatively impacts the buyer whilst the other is done by the buyer and negatively impacts the seller. Gazumping is where a seller has already accepted an offer on their house but then goes and accepts a higher offer from a new buyer. The existing buyer is then left with the decision: to pull out and find somewhere else or increase their original offer. Gazundering is when contracts are being negotiated and the buyer changes their offer amount at the last minute. The seller is then left to decide whether they simply accept a lower offer or reject and risk the whole chain collapsing. Gazanging is a highly frustrating situation where the seller simply decides to stop the sales process and take their house off the market – after accepting an offer and agreeing to sell.
What can be done to prevent these malpractices?
Constantly wondering what could be done to improve the UK property market and remove some of the stress out of the process for sellers and buyers was the ‘lightbulb’ moment that resulted in the creation of the HonestyBox.
The HonestyBox is a means by which GENUINE and motivated sellers and buyers can commit themselves to the transaction as well as showing commitment to each other. Giving each party greater confidence to proceed as well as significantly strengthening property chains.
For more information and to see if the HonestyBox can help you – please get in touch today.