Fewer than one in three (32%) of property sales in England and Wales fell through before completion in the first quarter of 2021, according to figures from Quick Move Now.
The property buying company found that the figure is 15% higher than the unusually low quarterly fall-through rate seen in the last quarter of 2020, but is 11% lower than last year’s annual fall-through rate, which stood at 43%.
The reasons for failed property sales offer an insight into the challenges currently being faced by the property market. Some 8% of all property sales failed to go ahead because the buyer struggling to secure a mortgage. This made up a quarter of all failed property sales.
Of the sales that failed to complete, a further 37.5% were attributed to the buyer changing their mind or unsuccessfully trying to renegotiate a lower purchase price.
The firm also saw the return of gazumping in the first quarter of this year, with 25% of failed sales being attributed to the seller accepting a higher offer from a new buyer.
Danny Luke, Quick Move Now’s managing director, said: “It’s hugely positive that the fall-through rate has dropped from the high annual rate we saw last year.
“We did see an exceptionally low fall-through rate in the final quarter of last year, so it’s not unexpected that we’ve seen a rise from that in the first quarter of 2021. There were several reasons for the low rates at the end of last year.
“Firstly, we had a large amount of pent-up demand after the first major national lockdown and people with a real need to move, for example due to relationship breakdown or for work commitments, were very motivated buyers and sellers.
“We also had the added encouragement of government stamp duty measures, with people keen to get their sales and purchases completed before the measures were due to come to an end in Spring of this year.
“Now those measures have been further extended, people are not feeling the same urgency. I believe this can be seen in the number of buyers pulling out of sales because they have changed their minds and also the general increase in the fall-through rate.
“Lender caution is also a clear factor, with eight percent of all property sales being impacted by difficulty securing a mortgage.
“This is something I would expect to see continue for some time to come, as lenders remain keen to ensure a secure position beyond the end of the stamp duty and furlough measures, when the true impact of covid becomes clear.”