The number of property transactions falling through is on the rise – costing buyers and sellers almost £240m in the last quarter alone, new figures from House Buyer Bureau reveals.
This figure has started to climb after two quarters in which numbers were reducing.
House Buyer Bureau analysed the number of transactions that fell through, the average cost and what the total cost to the property market is as a result.
The latest index shows that the average cost of a fall-through during the second quarter of 2023 was £3,394, up from £3,355 in Q1.
At the same time, the estimated number of transactions that fell through in Q2 hit 69,940, a 10.2% increase on the previous quarter.
As such, the total cost to buyers and sellers of fall-throughs in Q2 was an estimated £237.4m, an increase of 11.5% compared to £212.9m in Q1.
However, the stats show that current fall-through rates are still lower than they were this time last year.
The number of failed transactions is currently 10.4% lower than 12 months ago, while the total cost of fall-throughs is 5.9% lower.
House Buyer Bureau managing director Chris Hodgkinson says: “It was more or less inevitable that fall-throughs were due to climb this year and this increase has come at a considerable cost to the nation’s buyers and sellers at a time when finances are already stretched to breaking point.
“The market may have cooled in terms of transactional volumes, which has led to a reduction in fall throughs on an annual basis when compared to the heights of the pandemic boom.
“However, current market conditions are uncertain, to say the least, and many buyers have struggled with the increasing cost of borrowing which has forced them to reassess their position within the market.”
Hodgkinson says the best way to ‘bypass this property disappointment’ is to secure a cash buyer as the dangers of a fall through are dramatically reduced.
“This is easier said than done though, as our recent research found they have accounted for just 31% of sales across Britain in the last year,” he adds.
“The good news is, that with the Bank of England finally choosing to freeze rates last week, we should see a greater degree of stability return to the market during the closing stages of this year.”