"In terms of what 2021 holds for the property market, ‘uncertainty’ is the buzzword"
The figures, which have been released today by Quick Move Now, also show an annual fall through rate of 43%.
The reasons for failed property sales tell a story of how the property market faired as the global pandemic unfolded. During the first and second quarters of 2020, the primary reason property sales fell through was that the buyer changed their mind and pulled out of the sale. This accounted for 36% of failed sales in each quarter.
The third quarter saw new challenges for those buying and selling houses, as most property sales failed due to the buyer being refused lending or the buyer pulling out after a property survey. The final quarter of the year saw the majority of failed sales attributed to buyers pulling out after a property survey or the buyer being gazumped by a higher offer.
Across the whole of 2020, the top five reasons for property sales falling through were:
Buyer changed their mind and pulled out of the sale (31%)
Buyer unable to secure a mortgage (15%)
Buyer or seller pulled out of the sale due to slow progress (13%)
Buyer attempted to renegotiate the agreed sale price (11%)
Buyer pulled out of the sale after a property survey (11%)
Danny Luke, Quick Move Now’s managing director, commented:
“It’s a word that has been bandied about a lot in 2020, but this year really has been unprecedented. Although not officially shut down, the UK property market effectively ground to a halt for almost a quarter of the year. Government measures, such as the furlough scheme and the stamp duty holiday, managed to avoid the much-anticipated price crash, but there is still considerable caution about what lies ahead.
“The first half of the year was consumed by uncertainty. 46 percent of sales that failed during the first half of the year did so either because the buyer changed their mind or because they had a change in circumstances. There was a huge amount of uncertainty about the pandemic and the impact it would have on property prices, as many experts began predicting an imminent price crash. People also became increasingly concerned about the security of their jobs.
“Once the property market started moving again, government stamp duty measures provided a much-needed boost. We saw buyers and sellers return to the market quickly and enthusiastically. It was at this point, however, that we began to see the economic impact on lenders. 27 percent of failed sales in the third quarter collapsed as a result of the buyer being refused lending. A further 27 percent were attributed to the buyer pulling out of the sale after a property survey, and tales of mortgage lender caution and down-valuing properties at the point of survey were rife across the market.
“During the final quarter of the year we have felt the force of the looming stamp duty holiday deadline of 31st March, as buyers race to get the sale completed in time. Only 17 percent of property sales fell through before completion in the final quarter, which is an exceptionally low rate by usual standards.
“In terms of what 2021 holds for the property market, ‘uncertainty’ is the buzzword. It largely depends on what happens in the Spring, when both the stamp duty measures and furlough scheme are due to come to an end. We also have the added economic pressure of the Brexit transition period coming to an end on 31st December, and few are able to predict, with confidence, the impact that move will have on jobs, finances and the property market.”