Aborted Sales Rate over 30%
Quick Move FTI* at 30.46%.
Unfortunately, whereas there had been a plateau in the fall through rates between May and August, September saw an increase which spells further trouble for the housing market. The prospects for the latter part of 2011 and beginning of 2012 look even gloomier considering the fact that the number of sales agreed remains well under half the sale levels seen in 2007. Low sales volumes and an increasing fall through rate is a double blow and, for the ordinary vendor especially, causes considerable heart ache and cost.
Sales fall through due to a number of reasons: it can be due to the difficulty of obtaining mortgage lending and raising a deposit, other buyers within the chain pulling out, problems at survey, job insecurity and uncertainty within the market in general. As a result of the current economic problems, more and more people are becoming reticent and are pulling out of sales at different stages of the process because they are afraid of committing.
Even with a dedicated team managing the sale progression of our properties, abortions are unavoidable. The fall through rate would be higher and even more difficult to manage for independent home sellers, especially in a falling market with a high level of asking price reductions and long periods of time being spent on the market. It is not predicted that the economy will recover soon either which could mean more unemployment, falling asking prices, a lack of mortgage lending, higher inflation and, ultimately, an even higher rate of fall throughs if vendors are lucky enough to secure a sale in the first place.
Troubling predictions for the economy and the housing market extend into 2012 and, therefore, fall through levels may remain at 30% or even increase over the coming months as 2011 comes to a close. Sale abortions at this time of year result in the need to market over the winter period when the number of viewings traditionally decreases and the cost of maintaining a property increases due to the cold weather. Offers from buyers in a position to proceed are notoriously difficult to secure and, unless vendors are dealing with genuine cash buyers, fall through rates will inevitably rise.
*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.
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