The managing director of the company behind the study, Danny Luke, said; “Property prices have been climbing and climbing in recent months. At the same time, the UK has been experiencing a steep rise in inflation and lots of people are beginning to really feel the pinch from steep rises in the cost of living. It was inevitable that the squeeze on people’s wallets would begin to be reflected in mortgage companies’ affordability assessments. From our conversations with potential buyers and estate agents, it is clear that lenders are being more cautious about which properties they’re prepared to lend on and how much home buyers can afford to borrow in light of rising day-to-day living costs. Energy prices have already risen by 50% for most UK households, and they look set to increase even further through the latter half of this year and into 2023. That, of course, has a significant impact on homeowner affordability.”
There are many reasons why property deals collapse
It seems it’s not just lenders that are feeling cautious. Other reasons for failed property sales in the first quarter of this year included:
Some of the key reasons cited for property deals falling through includes:
· 34% of failed sales were down to the buyer changed their mind about the purchase
· 25% of failed sales occurred because the seller stopped the deal, citing slow progress
· 8% of failed sales are attributed to the buyer looking to renegotiate on the previously agreed sales price
· 8% of failed sales are down to a change in the buyers’ circumstances
We can help you better manage the sales process
Danny also said; “The property market has defied many predictions over the last two years, remaining buoyant and thriving despite challenging external conditions. Demand has remained strong since the end of the stamp duty holiday, and a shortage of properties coming to the market has led to exponential house price growth. However, both buyers and sellers are beginning to show more caution. Steeply rising living costs and worries about future financial security will undoubtedly impact buyer confidence.”
Danny continued by saying; “It’s little surprise that 34% of failed sales are attributed to the buyer changing their mind about a property after agreeing on a sale. There is such stiff competition for properties at the moment, that it’s easy for buyers to be pressurised into agreeing to a higher purchase price than they’re comfortable with, in order to secure a property. A few weeks in, when the sale really begins progressing, it’s understandable that buyers might start to get cold feet about the agreed sale price – which accounts for 8% of failed sales – or pull out of the purchase altogether.”
Danny concluded by talking about whether the current status of the housing market is sustainable. It wouldn’t be surprising if some of the demand fell away, but it must be remembered that the demand for homes considerably outstrips the supply of property.
Until there is greater parity in these elements in the property market, there is a good chance that the status quo will prevail.
He said; “Sellers also seem concerned that the current property bubble is unsustainable. 25% of failed sales since the start of 2022 have been a result of the seller pulling out of the sale due to slow progress. Sellers are keen to lock in the sale of their property before demand or prices begin to dwindle.”
We are on hand to assist Newton-Le-Willows homeowners present their home, and connect with buyers in the market. We are highly experienced in the local housing market, and we are sure we can help you connect with willing buyers.
Contact Fraser Reeves for all your Newton-le-Willows property needs
As local agents in Newton-le-Willows, we are keen to support vendors, buyers and landlords in the area as best we can. We offer an extensive range of services, aimed at helping you make your next move with confidence.
If you would like to arrange a property valuation, or discuss your property options, please call Fraser Reeves on 01925 222555.
