Level of fall-throughs decline - but for how long?

Fall-throughs are at their lowest quarterly level since the start of 2019, new data suggests.

Analysis by House Buyer Bureau has found the number of property transactions estimated to have collapsed across the UK market has continued to decline during the first quarter of this year, falling to the lowest quarterly level seen since the first quarter of 2019. 

It is estimated that just 63,970 transactions fell through during the first three months of this year. 

This marks a 16% quarterly decline versus the final quarter of 2022 and the second consecutive quarterly decline since a market peak of 90,188 fall-throughs seen in the third quarter of 2022. 

It’s also some 11% fewer fall-throughs on an annual basis, the research claims.

Much of this drop may just be because there are fewer sales taking place though.

A decline in the volume of fall-throughs has also led to a reduction in their total estimated cost to the market. Despite the average cost of an individual fall-through increasing by 2.1% over the quarter to £3,370 - the total estimated cost of the 63,970 transactions to have collapsed dropped by 14% on a quarterly basis. 

That said, fall-throughs still cost the nation’s homebuyers and sellers £215.6m during the first three months of this year alone, although this is the lowest quarterly total seen since the fourth quarter of 2021.

Chris Hodgkinson, managing director of House Buyer Bureau, said: “Market activity has been gradually declining since the closing stages of last year and we’ve seen these more subdued market conditions continue during the first quarter of this year. 

“A silver lining to this notable reduction in sales volumes has been a consequential drop in the number of transactions collapsing and this, on the face of it, is a positive. 

“However, the individual cost of a fall-through has actually increased and it’s also fair to say that while the total number of fall-throughs is on the slide, current market conditions are ripe for an increased threat of a sale collapsing. 

“Buyers are offering less, sellers are standing their ground, we’ve seen multiple interest rate hikes spur lenders into increasing rates and transactions are taking far longer to complete. 

“All of these factors can increase the chance of a fall-through and so while total numbers may be down, buyers and sellers should remain aware of the threat and do all they can to negate it in order to reach the finish line.”