New research has shown that the number of deals falling through pre-completion is on the rise. This comes against a backdrop of dwindling consumer confidence amid cost of living concerns and interest rate hikes.
Landmark Information Group’s Q2 2022 Property Trends Report shows that Q2 saw a return to consistent activity levels across the key milestone indicators (listings, SSTC, searches and completions), though this was at “more subdued” volumes than seen in previous years.
Listings hovered at or a little under normal (2019) levels while SSTC stabilised at around 87% of 2019 volumes, down on previous quarters
What’s more, the number of transactions reaching completion is down 11% on Q2 2019, as well as being down 7% on average from Q1 2022. Landmark put this down to transaction times continuing to lag, in part due to down-valuations, expired mortgage offers and consumer hesitancy.
Simon Brown, CEO, Landmark Information Group, noted that though the property market is stable across much of the transaction chain, we are “starting to see the friction between buyer hesitancy and seller bullishness on price being played out in completion rates”, adding that these were “already struggling due to inefficiencies and disconnects across the transaction process”. He continued:
“With buyers increasingly mindful of cost-of-living pressures and higher interest rates, there needs to be stronger confidence in the transaction process itself. Home-movers have to be able to trust that a transaction will run smoothly – at the moment the fragility of the system creates real risk of chain collapse for those wanting to move within a reasonable timeframe.”
This fits with research reported in June by Today’s Conveyancer which suggested that a quarter of agents had seen 10% or more transactions fall through over the last year.
However, viewing the data on the whole, Brown suggested it is not all doom and gloom:
“The data, overall, indicates a return towards 2019 levels and stability, which – we must not forget, after the extraordinary market activity of 2020 and 2021 – represents a return to ‘normal’ conditions for the UK property market.”
One Response
I am seeing clients not chasing matters as much as they once were. On some, there seems to be an attitude of if it goes through then great, if not we are not overly upset. Further, I am seeing people rush into offers without due diligence being carried out. A few fall throughs are as a result of buyers not having mortgages in place 4-10 weeks into the process indicating agents are not doing the due diligence required and accepting offers too quickly.