Remarkably, just 11 per cent of property sales fell through in the third quarter of this year as buyers raced to beat the stamp duty holiday deadline.
This is a drop of 28 per cent from the previous quarter, and well above the year-to-date average of 25 per cent.
Property firm Quick Move Now, which undertakes a quarterly analysis of fall-throughs, say the latest figure - applying to July, August and September - is “shockingly low” and attributes it to the stamp duty holiday deadline.
Quick Move Now managing director Danny Luke says: “We know that without any mitigating factors the fall-through rate will typically sit at around 25 to 35 per cent. Of course, we are not currently in ‘typical’ times. Fans of the measure say the stamp duty holiday gave the property market a much needed shot in the arm to get things going again after lockdown. However, critics suggest that it has done untold damage to the property market, artificially inflating prices and increasing the chances of a market crash.”
He continues by saying today’s market is almost unprecedented.
“The current high-demand, low-supply market has left buyers desperate to make each sale work, knowing that they may struggle to find another property if it doesn’t. The end of the stamp duty holiday has also, undoubtedly, had an impact on the number of sales being rushed through to completion in order for the buyer to benefit from the financial savings. Current low stock levels mean the majority of people who are moving have a strong need to do so. They are serious and committed to the move, which ultimately results in a lower fall-through rate.”
In those property deals that did collapse, Quick Move Now says the breakdown of reasons is as follows:
- buyer changes mind or tries late price renegotiation: 37 per cent
- buyer pulls out after survey or legal problems: 21 per cent
- slow progress leads to buyer pull-out: 16 per cent
- mortgage refusal for buyer: 10.5 per cent
- gazumping: 10.5 per cent
- other: 5.0 per cent.
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From a conveyancing and surveying point of view it would be interesting to know the split between survey or legal problems: 21 per cent?
Legal problems are indicative of not having the basic information available upfront for the buyer, so there are no surprises which become apparent later on in the transaction.
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