While the end of 2020 saw the housing market in robust manner, there is no getting away from the fact that many buyers, vendors and professionals were under considerable pressure.
The stamp duty holiday encouraged many people to be active in the housing market, but this created a significant backlog for many important services. It also meant some buyers were rushing decisions in the hope of enjoying a significant saving.
Figures from a study suggests many deals collapsed, and as we move into 2021, it is vital we understand the reasons for these collapsed deals. The more we know about the problems in the market, the greater our chances of avoiding these problems.
According to a study conducted on behalf of Quick Move Now, 53% of property deals in England and Wales collapsed in the third quarter of 2020. The same study indicates there was an annual fall through of 43%.
For 2020, the five most commonly associated 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.”
Danny also said; “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.”
Danny concluded by saying; “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.”
At Coakley & Theaker, we aim to support the local community as much as we can, and we know this is an extremely trying time. A lot of people are looking for support and guidance, and if you have any property or housing related questions, we are more than happy to assist you, so contact us today.