Aborted Sales Fall
Quick Move FTI* back up to 28%.After dropping to the lowest level for 4 years we have seen the fall through rate increase again.
So what has caused this turnaround? The threat of public sector cutbacks has definitely impacted on buyer confidence but we feel it is the tightening of mortgage lending that has really hit home over the past few months.
Over several months the statistics from CML and BBA have shown that the amount of mortgage lending is falling drastically. Net mortgage lending in September was just £1.6bn, which is the lowest figure since October 2000.
The truth is that banks are more than happy not to lend as they try and repair their balance sheets. Lenders are therefore implementing rigorous lending criteria and underwriting. Some of these measures are relevant attempts to avoid fraudulent/bad loans but many are ill thought out and are impacting every potential home buyer requiring lending.
Not only does the lack of lending mean there are fewer housing transactions taking place it also means that the fall through rate is increasing.
The problem is that property sales are often agreed on the basis of a mortgage having been agreed in principle (AIP). In the current market this AIP provides very little security that the borrower is likely to secure lending. Once a deal has been agreed the formal mortgage offer is then requested. In many cases the mortgage offer will never materialise because the borrower doesn’t fit the tighter underwriting criteria or their circumstances mean they cannot access the better value deals and so cannot afford the purchase agreed at the outset.
The current lending climate means that we are likely to see both low volumes of house sales and increasing numbers of house sales falling aborting.
*This figure is based on house sales that are professionally qualified and managed and the true rate of fall through for normal house buyers and sellers is likely to be much higher.
What is the Quick Move FTI?
Not all property sales that are agreed go on to complete and the percentage of sales falling through varies greatly with prevailing market conditions.
When a chain collapses sellers can face a number of issues:
-Large delay in selling as whole marketing/sale process is restarted.
-Lose onward purchase.
-Remain exposed to changing market conditions.
-Lose out financially with costs sunk into solicitors, estate agents, home information packs, survey and mortgage fees often exceeding £2000.
Quick Move agreed over 500 sales last year but like any seller we have trouble with chains and sales falling through. This is despite a dedicated sales progression team and detailed assessment of every buyer, their finances and related chain. The average home seller doesn’t qualify buyers to the same degree, so the general market fall through rate is much higher.
The Quick Move FTI is a 6 month moving average measuring the percentage of agreed sales that fall through.
The index is uniquely placed to give a current indication of how market conditions are affecting general home owners looking to sell their property.
Quickmovenow.com specialises in the rapid cash purchase of residential property. And our professional and competitive service provides clients with a quick, secure and efficient sale.
We assist clients in a range of circumstances but if your specifically want the certainty of selling without the complications of a chain or have been involved in a broken chain and want to secure your onward purchase-Quickmovenow.com could help.
If you want more information please complete a free online estimate or contact us direct on 0800 068 3366.
Quick House Sale Calculator
Fall Through Index
Refer a Friend
T: 0800 068 3366 
Email Us 
Facebook
0 Comments:
Post a Comment
Links to this post:
Create a Link