Climbing rates of property transaction fall-throughs are set to be maintained into 2023 as the cost of borrowing continues to rise, one key industry figure has suggested.
This follows new data from House Buyer Bureau which revealed that there has been a sharp increase in both the number of property transactions falling through in Q3 2022 as well as the cost associated with such fall throughs.
Specifically, their latest index* shows that in Q3 of last year, 90,188 transactions are estimated to have fallen through, a 15.6% increase on a quarterly basis and a 3.6% uplift versus this time last year. This is also the highest quarterly number of fall throughs recorded over the last five years.
What’s more, a combination of runaway inflation and increasing house prices have pushed the average cost of a property transaction collapse to £3,337, totalling an estimated £301m cost in Q3 2022. This total cost is not only 18.7% up on the previous quarter, but also 16.3% on an annual basis.
Ominously, it has been suggested by Managing Director of House Buyer Bureau Chris Hodgkinson that this trend is “likely to be maintained into 2023” following further hikes to the base rate.
“We’ve seen a consistent increase in the number of property transactions falling through in recent years and despite a fairly settled start to 2022, the latest data shows that the number of sales collapsing hit a five year high in the third quarter of 2022,” said Hodgkinson, continuing:
“This is almost certainly due to the turbulence that came via the mortgage sector in September, as lenders pulled a raft of products and increased mortgage fees in reaction to the Bank of England’s aggressive attempts to curb inflation via a string of consecutive interest rate increases.
As a result, many buyers found that they could no longer afford the cost of borrowing which has led to swathes of property sales falling by the wayside during the second half of last year.”
* House Buyer Bureau analyses 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.
