Three in 10 property purchases fall through

New research from Which? Mortgage Advisers reveals that three in ten (28%) homebuyers have had a house purchase fall through after their offer was accepted, and on average homebuyers were left nearly £3,000 out of pocket as a result.

The survey of 2,000 homebuyers – who bought their home in the previous two years – found that it takes over 4.5 months on average, from starting a property search to having an offer accepted. However, 28% of purchases fell through after that point.

The main reasons for a property purchase falling through were:

●     The seller decided not to sell their home after all (27%)

●     The buyer pulled out, as their own property sale had fallen through (21%)

●     The buyer found somewhere else to buy (21%)

●     The buyer was ‘gazumped’ (21%)

Of those who had lost money and knew how much they were out of pocket, the average loss was £2,899. This included conveyancing, survey, mortgage valuation or brokerage fees paid and not recovered.

Many homebuyers experience failed transactions due to problems in the ‘property chain’ – the line of buyers and sellers linked together because each is selling and buying a property from another.

Which? Mortgage Advisers gives the following top tips for buyers to help avoid long or complicated chains and increase the chance of a successful transaction:

  • It’s worth considering selling your property and moving into short-term rented accommodation or with family or friends. You’ll then be a chain-free cash buyer, which you can use to your advantage when making an offer as you’ll be much more appealing to the vendor.

  • If you’re buying and can afford to be picky, look for properties where the upward chain is short or, even better, non-existent – for example if the vendor owns it as a second home and doesn’t need to find somewhere else to live.

  • New-build homes have no upward chains for obvious reasons – and if you’ve got a property to sell, the developer may offer part-exchange, meaning they’ll buy your old property to help speed things up.

  • If you’re in a hurry, try and get the vendor of the property you’re buying to agree to a date by which they are prepared to move out, whether they’ve bought somewhere themselves or not. Vendors will sometimes agree to move into rented accommodation to avoid risking the deal falling through.

David Blake at Which? Mortgage Advisers, said:

“No one wants to see their dream property slip through their fingers, particularly if it leaves you out of pocket, but there are steps you can take to ensure you are in the best possible position.

“The best way to protect yourself from your purchase falling through is to avoid a lengthy chain. With the right preparation and research, including getting your finances in order prior to making an offer, you can avoid complicated chains and improve your chances of success.”

For more advice on managing a property chain and keeping things moving, visit:

www.which.co.uk/failedtransactions

 

- ENDS –

Notes to Editor:

  • In February 2016, Which? Mortgage Advisers surveyed 2,000 members of the general public (who had bought the house they live in in the previous two years) about their experiences. The results are based on a nationally representative sample of the UK.

  • Which? Mortgage Advisers is a Which? service launched in 2010. When an important market fails to deliver value to customers, we develop products and services that put customers’ needs first. Which? Mortgage Advisers provides truly independent whole-of-market mortgage advice. You can find our more by visiting: mortgageadvisers.which.co.uk

  • Homebuyer Polly, who had to put offers in on four properties before having any success, said:

“We completed on our property purchase nearly five months – and four failed offers – after our final offer was accepted. We certainly didn’t expect the process to be as long or as stressful.

“On one occasion, we offered full asking price for a property but the seller became uncontactable. On another, the vendor decided to rent out the property, unbeknown to the estate agent. On our third attempt, we offered full asking price and stressed that we would be willing to negotiate, but we were later told the property had been sold, with no opportunity to increase our offer.”

  • Full table of findings (reasons for failed transactions)

Reason

% of those who experienced a failed transaction

The seller pulled out – they decided not to sell their home after all

27%

I (buyer) pulled out – my own property sale had fallen through

21%

I (buyer) pulled out – I found somewhere else to buy

21%

The seller pulled out – someone else made a higher offer (I was gazumped)

21%

I (buyer) pulled out – I decided I didn’t like the property enough to buy it after all

15%

I (buyer) pulled out – the process took too long

13%

The seller pulled out – the process took too long

7%

We (buyer and seller) had a disagreement and couldn’t find a resolution, so the transaction collapsed

4%

Other

8%

Note: Qualifying questions asked ‘Have you ever had an offer accepted on a property only for the deal to fall though?’. Base: all property buyers last two years (2,000). Those who had had a property fall through were asked ‘You said that you have previously had a property fall through. What was the reason for the deal falling through?’ Base: all who have had a property fall through (555).

 

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