Fall-throughs on the rise as mortgage costs spiral - warning 

The number of property sales falling through has increased for the first time since the height of the pandemic market boom at an average cost of more than £3,000 for those involved, new research claims.

Analysis by ‘quick buy’ firm the House Buyer Bureau, using TwentyCi data, has tracked the number of transaction fall throughs across the UK property market and how much this costs for buyers and sellers in the transaction.

The research found that some 78,042 sales are estimated to have been subject to a fall through during the second quarter of this year. 

This marks a 9% increase versus the previous quarter and the first quarterly increase since a market peak of 87,817 in the second quarter of last year.

The level of fall throughs remains down 11% annually versus the peak seen in the second quarter of 2021, according to the research.

But while fall through volumes are still down on the previous pandemic market peak, the average cost of a fall through has climbed to a record high. 

The latest figures show that the average fall-through now costs those involved £3,209 per a transaction - a 2% increase on the previous quarter and a 9% annual jump. 

As a result, the total cost of transaction fall- throughs, including fees already paid such as conveyancing and surveys, to the UK property market exceeded £250m in the second quarter of this year alone. 

The figure is 11.2% more than the first quarter of the year, with the total cost of fall throughs in 2022 so far alone hitting almost £476m. 

In 2021, this total market cost hit over £1bn, the highest annual cost to the market in the last four years, with 2022 looking likely to come close, if not exceed this threshold. 

Chris Hodgkinson, managing director of the House Buyer Bureau, said the cost of fall-throughs in 2021 was more than £1bn and said this year could come close or even exceed that figure.

He said: “Property sale fall-throughs are simply an unfortunate reality of a property market that affords very little protection to buyers and sellers right up until a sale has actually completed. 

“While it’s the buyer that often gets hit by the majority of the cost, both parties can see their hard-earned cash go to waste due to a fall through, having paid out for costs such as conveyancing fees, with many sellers also hit if their own onward purchase is jeopardised.

“Unfortunately, we saw the level of fall throughs plaguing the market hit new highs during the manic frenzy of the pandemic property boom. This was largely down to an increased number of transactions in general, coupled with a market that was swamped with buyers fighting it out for limited stock, with the practice of gazumping becoming particularly prevalent.

“While the volume of fall throughs had been in slow decline, they’ve started to climb once again in 2022.”

He suggested the driving factors behind fall-throughs in the current market are different and include spiralling mortgage rates.

Est average cost of fall through based on source value and vs house price, as well as estimated according to inflation increases and legal fee increases (Sources: Smoove, Homeowners Alliance, Property Rescue, Home Selling Expert)