Keep Your Property Deal On Track
With so many property deals taking place right now, it shouldn’t be a surprise that some collapse. There are many reasons why property deals fall through.
Some of these reasons can be avoided, some cannot, but at prestige & Village, we are on hand to assist you as best we can. We understand the challenges people face in the housing market, and we will do everything we can to ensure you make informed decisions when its time to move.
If you are looking to keep your property deal on track, work with companies who have an excellent track record.
Why do property deals collapse?
Between April and June of 2021, one in five property transactions collapsed. Some of the reasons behind this outcome include:
- Buyers looking to reduce their offer after the sale had been agreed
- Buyers getting cold feet, leading to them pulling out of the sale
- The stamp duty holiday deadline – with 11% of respondents saying the transaction fell through because they felt it wasn’t moving quickly
- 6% of transactions collapsed after the initial buyer was gazumped
In the second quarter of 2020, the fall-through rate was 38%. In the second quarter of 2021, the fall through rate was 38%.
What do the property market experts say?
Danny Luke, is the managing director of Quick Move Now, the company who supplied the data, and he said: “Whilst the government’s covid measures have done their job in terms of kickstarting the property market post-lockdown, they have also created this slightly artificial and highly pressurised market. Many properties are going under offer within hours of going on the market, and buyers are often offering above asking price to try to beat their competition.”
Danny also said; “The problem with this sort of dynamic, as evidenced in the fall through figures, is that the pressure can lead to impulse offers, that buyers later withdraw. This means the buyer and seller both have to deal with a failed house sale that can be costly in both time and money. In the first quarter of 2021, 12 percent of failed sales were attributed to the buyer trying to lower their offer or getting cold feet. In the second quarter of the year, that figure almost doubled to 22 percent. That just shows the pressure would-be buyers are under.”
Danny Luke also added; “In the last quarter, we have also seen the race to beat the stamp duty holiday deadline. 11 percent of sales fell through because the buyer or seller felt the sale was not progressing quickly enough. In the first quarter of this year that figure was just 4 percent. Our figures suggest that gazumping has also become more prevalent over the last year, with around 5 percent of buyers having been gazumped in the last 12 months.”
Danny Luke concluded by saying; “Now that the stamp duty holiday has begun its phased withdrawal, I think we will see the pressure ease a little. Ultimately, the current market conditions are artificially inflated and are not sustainable in the long term, as wages simply cannot keep up with price growth. I would expect for there to be a cooling-off towards the end of the year, where we will see prices stabilise and perhaps even fall slightly. We have yet to see the economic impact of the end of the government’s furlough scheme and what that means for job security. I suspect the end of furlough will have an impact on buyer demand, as the public begins to again perhaps show an increased level of financial caution.”
At Prestige & Village, we care about our community, and supporting others. We aim to provide you with as much help and assistance as we can. If you have any property or housing questions, please feel free to contact us today.Back to blog