"Speculation that interest rates will fall has also led to caution amongst buyers. No one wants to ‘overpay’ now, to then find that they could have got a better deal if they’d held out another six months. Buyers are dipping their toes cautiously, but it doesn’t take much for them to be scared off"
- Danny Luke - Quick Move Now
31.3% of property sales fell through before completion in the first three months of this year, according to new data from Quick Move Now.
Of the sales that fell through in the first quarter, two-thirds were caused by the buyer changing their mind, pulling out after the survey, or unsuccessfully attempting to renegotiate a lower purchase price after the sale had been agreed.
Why did property sales fall through in Q1 2024?
Danny Luke, Managing Director at Quick Move Now, explained: “Although our figures officially attribute a fifth of failed property sales to difficulty securing a mortgage, our research suggests that volatility within the mortgage industry is having a far greater impact on the quantity and success of property sales.
“Interest rate changes are continuing to have a big impact on buyer confidence. According to recent data, mortgage products are now typically available for just 15 days before being pulled. This is putting buyers under huge pressure to make quick decisions.
“Speculation that interest rates will fall has also led to caution amongst buyers. No one wants to ‘overpay’ now, to then find that they could have got a better deal if they’d held out another six months. Buyers are dipping their toes cautiously, but it doesn’t take much for them to be scared off.
“Higher interest rates mean budgets are already stretched beyond levels buyers are used to, which accounts for a high number of attempted renegotiations after the sale has been agreed. There is now much more expectation from buyers that they should receive a discount for any issues identified at the point of the survey.
“A slower market also means chain break is impacting sale success. In a heated property market, chain breaks can quickly be resolved. In a slower, cooler market, it can take several months to find another buyer, which will often lead to the collapse of the entire property chain.
“Should the Bank of England lower their base rate in the coming months, as predicted, we could see higher levels of confidence returning to the market. Buyers and sellers have now become more used to the idea of higher interest rates but are still, understandably, keen to get the best deal they can.”
