Fall-throughs are starting to rise

The number of property transactions estimated to have collapsed across the UK market has started to climb after two quarters in which numbers were reducing, new research suggests.

Quick-buy firm House Buyer Bureau (HBB) has analysed the number of transaction fall-throughs across the UK property market, what this means in terms of the average cost of a fall through and what the total cost to the property market is as a result.

The research shows that the estimated number of transactions that fell-through during the second quarter of 2023 hit 69,940, a 10.2% quarterly increase.

The average cost of a fall-through during the second quarter of 2023 was £3,394, up from £3,355 in the first quarter.

As such, the total cost to buyers and sellers of fall-throughs was an estimated £237.4 million.

This marks a quarterly increase of 11.5% compared to the first quarter total of £212.9 million.

While the quarterly picture is disappointing, HBB said the 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 a year ago, while the total cost of fall-throughs is 5.9% lower.

Chris Hodgkinson, managing director of HBB, said: “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.

“This has been a driving force behind the recent uptick in sales collapsing during the second quarter of the year and 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.

“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.”