Experts have suggested that the property market may be returning to normal after a turbulent couple of years.
Danny Luke has been examining the number of property sales that fall through before completion, suggesting that the figures can offer an insight into the health of the property market.
Danny, from quick house sale company Quick Move Now, explains: “We usually expect between one-in-three and one-in-four property sales to fail before completion. Between July and September of this year, when people were rushing to get their sale completed before the stamp duty holiday deadline and there was a shortage of properties on the market, just 11 percent of property sales fell through.
“Although, on the face of it, a low sale fall through rate would appear to be good news for the property market, the usually low figures made it clear that the market was not operating under usual circumstances and was experiencing an imbalance.
“By the end of 2021, the fall through rate had returned to a more expected level, with 34 percent of sales failing to complete. This indicates that the market is beginning to return to more normal conditions.
“If we want to understand what’s happening to the market, it’s important that we also study the reasons for failed sales. Although fall through rates have returned to more normal levels, the reasons for the failed sales give us an insight into the psychology of home buyer and sellers. Of the sales that fell through in the last three months of 2021, 50 percent were the result of the buyer changing their mind or attempting to renegotiate their offer. This would indicate that buyers are feeling under pressure to make high offers and then reconsidering how much they’re happy to pay when the sale is in progress and the pressure eases a little.
“A further 28 percent of fall throughs were due to gazumping or because the seller felt the sale wasn’t progressing quickly enough, so it seems buyers are right to feel the pressure when it comes to price and speed.”
