More than 35 percent of property sales fell through last year, according to new figures published by Quick Move Now.
2022 was a mixed year for the property market – from record-high asking prices, to mortgage market chaos and steeply rising interest rates – so it’s little surprise that the fall-through figures reflect a high level of uncertainty.
Of the sales that failed in 2022, 37.3 percent were caused by the buyer changing their mind and pulling out. A further 23.7 percent of failed sales collapsed because the buyer was unable to secure a mortgage, or experienced a change in circumstances that meant they were no longer able to commit to the purchase.
Danny Luke, Managing Director of Property PX Group said:
“2022 was a strange year for the property market. Many experts predicted that we would begin to see a cooling of prices, but few could have predicted the mortgage market chaos caused by Truss and Kwarteng’s mini budget or the speed at which the market would change. We were already seeing reduced affordability, as a result of
rising inflation and a ‘cost of living’ crisis, before steeply rising mortgage interest rates added hundreds of pounds to thousands of people’s mortgage repayments. We spoke to one buyer who was forced to pull out of a sale shortly after Kwarteng’s mini budget. The 35.3% of property sales fell through in 2022 37.7% of property sales fell though in Q4 23.7% of failed sales fell though due to difficulty getting a mortgage or change in personal circumstances day after his mortgage valuation, his mortgage product was one of hundreds withdrawn from the market as a reaction to the uncertainty. He was offered a new mortgage product, but at an interest rate 3.25 per cent higher than his original product, he was no longer confident in his ability to afford the monthly repayments. This is a story that was repeated many times up and down the country.
“When we look at fall through rates, we analyse monthly, quarterly, and year-to-date figures. The quarterly figures for the last three months of 2022 tell an interesting story. The fall through rate for the fourth quarter was 37.7 per cent, which was just over two percent lower than in the third quarter. However, the quarter was very much split in terms of trends. In October and November, the fall through rate was high (41.2 percent and 52.6 percent respectively), as we witnessed the fallout from a great deal of political uncertainty, reduced affordability, and fears about falling house prices. However, in December we saw the fall through rate drop to just 17.6 per cent. By this point, the volume of property transactions had fallen dramatically, leaving just serious, committed buyers who were financially resilient and confident enough to continue with their purchase despite the turbulent and uncertain market conditions.
“Over the next 12 months, sale numbers are expected to continue to be comparatively low, but I’m confident that the market will settle into a new ‘normal’ rather than grinding to a halt. There are still those with a strong need to move and a shortage of properties coming to the market. Prices and volumes may be lower, but the market is resilient.”
As we enter a more challenging market, you will need to ensure you have the right incentives to compete with your competitors and continue to fill your sales pipeline.
Property PX Group can complete the sale of a property in as little as 7 days. So even if your buyer experiences a chain break at the last minute, Property PX Group can step in to buy and save your sale
We work with developers of all sizes and can either offer a complete outsourced part exchange service or support an existing in-house offering."
If you’d like to find out more about how Property PX Group could support your sales, you can call and speak to Scott or a member of the client management team on: 01793 268960 or email email@example.com