While it is good to see so much activity in the housing market, there are challenges to overcome. At Intercounty, we are keen to help as many people move as we can, but when there are more property market moves, the chance of property deals collapsing increase.
This stands to reason, purely on the law of averages. If you want to better manage risk, and minimise your exposure, call on the services of a skilled professional with a strong track record in the local property market.
Why do property deals collapse?
Between April and June of 2021, one in five property transactions collapsed. Some of the reasons behind this outcome include:
Buyers looking to reduce their offer after the sale had been agreed
Buyers getting cold feet, leading to them pulling out of the sale
The stamp duty holiday deadline – with 11% of respondents saying the transaction fell through because they felt it wasn’t moving quickly
6% of transactions collapsed after the initial buyer was gazumped
In the second quarter of 2020, the fall-through rate was 38%. In the second quarter of 2021, the fall through rate was 38%.
What do the property market experts say?
Danny Luke, is the managing director of Quick Move Now, the company who supplied the data, and he said: “Whilst the government's covid measures have done their job in terms of kickstarting the property market post-lockdown, they have also created this slightly artificial and highly pressurised market. Many properties are going under offer within hours of going on the market, and buyers are often offering above asking price to try to beat their competition.”
Danny also said; “The problem with this sort of dynamic, as evidenced in the fall through figures, is that the pressure can lead to impulse offers, that buyers later withdraw. This means the buyer and seller both have to deal with a failed house sale that can be costly in both time and money. In the first quarter of 2021, 12 percent of failed sales were attributed to the buyer trying to lower their offer or getting cold feet. In the second quarter of the year, that figure almost doubled to 22 percent. That just shows the pressure would-be buyers are under.”
Danny Luke also added; “In the last quarter, we have also seen the race to beat the stamp duty holiday deadline. 11 percent of sales fell through because the buyer or seller felt the sale was not progressing quickly enough. In the first quarter of this year that figure was just 4 percent. Our figures suggest that gazumping has also become more prevalent over the last year, with around 5 percent of buyers having been gazumped in the last 12 months.”
Danny Luke concluded by saying; “Now that the stamp duty holiday has begun its phased withdrawal, I think we will see the pressure ease a little. Ultimately, the current market conditions are artificially inflated and are not sustainable in the long term, as wages simply cannot keep up with price growth. I would expect for there to be a cooling-off towards the end of the year, where we will see prices stabilise and perhaps even fall slightly. We have yet to see the economic impact of the end of the government's furlough scheme and what that means for job security. I suspect the end of furlough will have an impact on buyer demand, as the public begins to again perhaps show an increased level of financial caution.”
If you are looking to sell your Sawbridgeworth home, it is helpful to know what buyers are looking for, and what is on offer in the local market.
For property enquiries in Sawbridgeworth, please feel free to call us on 01279 600333 or why not email us at firstname.lastname@example.org. With considerable experience in the local market, and free valuation services, we look forward to helping you move.