The number of property sales falling through has increased for the first time since the height of the pandemic market boom, according to analysis by House Buyer Bureau.
The latest HBB index shows that some 78,042 sales were estimated to have been subject to a fall-through during the second quarter of 2022. This represents a 9% increase versus the previous quarter and the first quarterly increase since a market peak of 87,817 in the second quarter of last year.
The level of fall-throughs seen in Q2 2022 remains 11% down annually versus the peak seen in Q2 2021. However, the average cost of a fall-through has climbed to a record high, according to the latest figures, with the average fall-through now costing those involved £3,209 per transaction – a 2% increase on the previous quarter and a 9% annual jump.
As a result, the total cost of transaction fall-throughs to the UK property market exceeded £250m in the second quarter of this year alone – 11.2% more than the first quarter of the year, with the total cost of fall-throughs in 2022 so far alone hitting almost £476m. In 2021, the total market cost reached over £1bn – the highest annual cost to the market in the last four years.
“Unfortunately, we saw the level of fall-throughs plaguing the market hit new highs during the manic frenzy of the pandemic property boom,” said Chris Hodgkinson, managing director of HBB. “This was largely down to an increased number of transactions in general, coupled with a market that was swamped with buyers fighting it out for limited stock, with the practice of gazumping becoming particularly prevalent.
“While the volume of fall-throughs had been in slow decline, they’ve started to climb once again in 2022. We expect this upward trend to continue, but the driving factors behind this increase are likely to be very different in the current market.
“We’ve seen mortgage rates spiral in recent weeks and this increased cost will cause many buyers to get cold feet, having already agreed a sale but not contending with a far higher cost of borrowing,” Hodgkinson added.