31 Jan RISING numbers of house-moves are collapsing at the last minute
RISING numbers of house-moves are collapsing at the last minute, a leading property association has warned today.
The National Association of Property Buyers says there has been a “marked rise” in the level of chains breaking down since Christmas.
Spokesman Jonathan Rolande said: “There’s no doubt this is an increasing problem. The likelihood of a collapse has actually been rising significantly since the Autumn since the botched mini-Budget. And this trend has accelerated since Christmas.
“There are a number of reasons why a sale falls through – but among the most common are ill-health, redundancy, being declined a mortgage and not being able to secure an affordable rate.
“I think the property shortage may also be driving this. When a property comes onto the market at a competitive price, there can be a high amount of activity. Some bidding for the property may be overstretching themselves to try and ensure they don’t lose out only to then find they can’t actually afford to finalise the transaction.
“This is obviously deeply frustrating for all involved. . A chain collapse is devastating. Those affected might find new jobs, schools and other plans disrupted, delayed or even cancelled altogether because somebody down the line has had a change of heart or can’t get the money they thought was assured.
“What’s more, to add insult to injury, fees paid for surveys, searches and solicitors will all be lost and the transaction will be back to square one. It’s frustrating, annoying and costly.”
Mr Rolande’s warning comes as new figures show fall-throughs have hit one of the highest rates since the financial crisis – as thousands more buyers chose to terminate sales that had been agreed.
The share of agreed sales collapsing before exchange jumped to a high of 25.4pc in November, up from 23pc in October and 21pc in September, according to TwentyCi, a property data company. This compares with a rate of 22pc in November 2021 and 23pc in the same month in 2019.
Estate agents have also reported a sharp increase in fall-throughs in the final quarter of last year as buyers suddenly found themselves unable to afford a higher mortgage rate or believed house prices were likely to drop in the coming months.
Another major reason for the collapse in sales has been mortgage deals being withdrawn and offers being renegotiated in the aftermath of the mini-Budget. Some 1,600 mortgage deals were taken off the market. Meanwhile, the average rate on a two-year fixed mortgage jumped to a 14-year high of 6.65pc from 4.74pc previously.
