Over half of house moves fall through after an offer is accepted – costing £2bn per year
More than half of UK house moves fall through after an offer has been accepted, costing the UK £2bn every year in wasted time and fees.
Failed house moves could cost the economy £1.97bn per year because around 1.2m residential transactions occur each year and the average fall-through costs buyers and sellers £2,830 in legal fees, surveys and mortgage costs.
The UK housing market is already suffering from stagnant demand, as fears that interest rates will stay higher for longer due to the Iran war cause Brits to hold off on deals.
As many as 58 per cent of property transactions fall through after an offer is accepted, according to a survey of 5,000 recent home movers by the Open Property Data Association (OPDA).
Most fall-throughs waste three months of buyer and seller time, and while one in six transactions collapse after four months and one in ten fail after five months or more.
Housing market ‘failing consumers’
Maria Harris, chair of the OPDA, said the UK’s housing market is “failing consumers at every stage”.
“Far too many transactions collapse because crucial information only comes to light weeks or even months after an offer is made.
“By then, buyers and sellers have already invested significant time, money and emotional energy,” she said.
Phil Spencer, founder of property advice website Move iQ, said property fall-throughs can be “devastating” for those involved.
“For buyers and sellers, these fall‑throughs often mean months of uncertainty, money lost on fees that can’t be recovered, and plans put on hold,” he added.
In April, a London resident told CityAM about the impact of the collapse of the sale of her £4m property.
“We’ve had quite bad luck in that respect and it can be really soul-destroying. We love the house so much but we are really keen to just get on now,” she said.
Labour moves to stop fall-throughs
Last year, the government backed an initiative designed to “revolutionise” homebuying, exploring the use of digital technology to prevent transaction failures, cut legal fees and increase transparency.
The project will see the Centre for Finance, Innovation and Technology (CFIT) work in coalition with multiple government departments, including the department for business and trade and the ministry for housing.
Digital economy minister Liz Lloyd said when announcing the initiative: “Buying a home can be time-consuming, lengthy and stressful.
“Using smart data has the potential to make this quicker, more secure and more transparent for consumers when they are making the biggest, most important purchases of their lives.”
House price growth flatlined in March and property experts have called on the government to introduce emergency measures.
Leading housebuilders, like FTSE 250 listed Persimmon, have warned that fragile consumer confidence threatens the viability of new housing projects.