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One buyer in six pulls out - more fuel for reforming the buying process?

There’s more fuel added to the current debate about reform of the house purchasing process, as new data reveals one buyer in six pulls out of a deal.

The most common reasons were regarding purchaser finance, a disagreement over the price or a simple change of mind by the buyer. 

The study involved 2,056 people over the age of 18, each of which had previously sold at least one property.

Of the sellers, it was discovered that 16 per cent had seen the sale of their house fall through because the buyer had pulled out of the deal.

When asked what reason was given some 17 per cent said they did not know but of the rest:

- 24 per cent said the buyer couldn’t raise the funds;

- 19 per cent blamed disagreements over price;

- 16 per cent said the buyer simply chose to buy a different property;

- nine per cent said the buyer’s own sale fell through; and

- eight per cent blamed a problem thrown up by the survey.

Some 14 per cent said they had fallen prey to gazundering and ended up selling their home for less than the amount that was initially agreed. The average difference in price was £8,500

For those whose deals collapsed, the average sum lost as a result of the buyer pulling out was £1,945.

In the study, for the Thomas Sanderson company, 31 per cent of respondents said they blamed estate agents for the problem.

Interestingly - given the current industry debate about reservation fees - 61 per cent of respondents said they thought the buyer should be made to pay lost fees if they pull out of a deal.

On the other side of the coin, it was found that one in nine sellers had pulled out of a deal to sell their home after putting it on the market. 

The findings go to the heart of the current industry debate about buying reforms.

In January the Ministry of Housing, Communities and Local Government revealed that politicians and officials were studying a ‘model’ two page reservation agreement drawn up by a law firm as a possible way of slashing fall throughs and speeding up transactions. An announcement is expected soon on a pilot project.

The government has also hinted that it is looking at the idea of property ‘log books’ - although it insists it has no intention of reintroducing Home Information Packs which had been widely criticised by agents and others in the property industry a decade ago. 

The government has already clamped down, via new guidelines from the National Trading Standards Estate Agency Team, on what it considers to be unfair and unreasonable referral fees during the property purchasing process.

  • Andrew Stanton Estate Agency Insights And Strategies

    This article re-enforces what everyone in the industry knows, roughly one in three sales fall through. I know it will be a small study group, but if 16.66% of buyers pull out and 11.11% of vendors do the same then that is a cancellation rate of 28%. In a more buoyant market that rate fluctuates to 30-35%.

    I am not sure regulation by the government or any organisation will change that situation, buyers circumstances change, so too does the vendors. Chaining down either party pre-exchange with reservation agreements is just another level of red tape.

    Also, given Brexit, I think that MP's are the last people I would want to be tinkering about with the house selling process in the UK, some of whom are talking strongly about resurrecting the HIP's system.

    I am all for keeping sales together and making agencies profitable, but a think tank of estate agents who do the job day in day out - would be where I would start for good pointers - rather than persons who have never sold property, or used to but are now living in ivory towers, oblivious to the needs and wants of vendors, buyers and estate agents in 2019.





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    These are interesting stats but I'd like to know the reasons why 11.11% of sellers pulled out too? One could assume it mirrors the buyer's reasons, largely because those sellers are also likely to be buyers, unless they are probate sales.

    It would also be interesting to know the reason why the 14% ended up selling their home for less than the amount that was initially agreed. Most people are honest and therefore one could assume there were good reasons to reduce their offer. Probably something in the survey or information gained during the conveyancer's due diligence. Either way, if more information was available up front, buyers would have much more insight from the outset, even before they viewed the property.

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    Christian, there are dozens of reasons why sellers pull out of a deal. But the big new one could be when they find out how much stamp duty they have to pay on their next home purchase. Possibly when they bought 15 or 20 years go, it was 1%. Suddenly the thought of giving the Govt another 6, 8 or 10% of tax for their next house purchase comes as massive shock and on principle stay put and pull out. I met Boris Johnson recently and we discussed this tax on homes, he said that is the one thing previous Chancellor George Osbourne got wrong. Absolutely right.

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