The UK’s housing market is one that’s closely monitored, measured, analysed and discussed. Unfortunately, among those details that feature highly, are broken home purchase chains. And, while there’s often a lot said about sellers being the main culprit, recent data suggests its buyers who are most often the root cause of a property sale falling through.
Research conducted by YouGov for the HomeOwners Alliance and online home buyer IMMO, suggests that some 69% of home sales don’t complete due to buyer-related reasons. That’s something that collectively costs home sellers £400,000 per year.
“The current system has created a fundamental power imbalance between the seller and the buyer, with the seller often at the buyer’s mercy during what is often the largest financial decision of their lives,” said IMMO co-founder, Samantha Kempe.
Common endings to sale agreements
At 39%, the most common reason behind a verbally agreed sale falling through, is a buyer pulling out of the sale because they’ve changed their mind or found another property they prefer.
Other common reasons identified by the survey are:
- 28% of sellers said their home sale fell through because the buyers didn’t have their finances in order.
- Some 8% experienced ‘gazundering’ where the buyer offered a lower price close to the final completion date.
- While 6% said their buyers pulled out of the sale after the survey results.
Of course, in some cases it could be argued that the buyer made the right choice. In the wake of a survey it can be difficult to come to terms with the results, particularly if it means more investment on the buyers’ part.
However, the current system is totally open to these situations happening again and again.
“Gazundering and time wasting is a huge problem,” said Paula Higgins, CEO of HomeOwners Alliance. “The home selling system is so unreliable it’s deterring homeowners from selling – adding to the ongoing housing shortage crisis as a lack of suitable homes is one of the barriers to people moving up the property ladder.”
Firmer commitment, earlier
The story of house sales falling through at the last minute and both parties often having to suck up hundreds and sometimes thousands of pounds in wasted surveys, solicitors fees and searches – not to mention the stress – is, unfortunately, nothing new.
But, the clamour of voices calling for a legally binding agreement or commitment to the process before an exchange of contracts, is growing. Not least because the UK Government is considering the idea of voluntary reservation agreements.
Introducing a firm commitment to complete the purchase process, earlier during the agreement would give both the seller and the buyer peace of mind that the deal will definitely happen. It’s likely that could help speed up the process too – if people know for certain they’re definitely buying a property, and don’t have the option of pulling out further down the line, then they’re much more likely to urge everyone involved to do their part more quickly.
“Sellers should be able to proceed with the sale of their property knowing what price they will receive and feeling assured that the sale will go through,” Kempe said.
Removing the uncertainty of whether or not a house sale will really go through will help home-owners feel more confident about putting their house up for sale. It will also save future sellers the financial pain of losing anything between £2,700 and over £5,000 pounds, due to a late collapse in the sale of their property.