One in five property transactions collapse each year
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More than 300,000 property transactions collapse every year, costing sellers £400 million.
According to a study by HomeOwners Alliance, a fifth of sellers have seen their sale fall through – an experience that has cost them an average of £2,727.
Buyers were to blame for 69 per cent of sales collapsing, either because they had changed their mind/found a preferable property or they didn’t have their finances in order. Sales falling through further up a chain accounted for 20 per cent of collapsed sales.
Gazundering – the buyer lowering their offer close to exchange – was to blame in 8 per cent of cases.
The research follows proposed government plans to introduce legally binding voluntary reservation agreements, which would require both buyers and sellers to put down a non-refundable deposit early in the process.
65 per cent of respondents said they supported the idea of a reservation agreement, while 80 per cent said they would like to see buyers show proof of funds before being able to put in an offer to buy a property.
Paula Higgins, Chief Executive of HomeOwners Alliance said: “Gazundering and time wasting is a huge problem. The home-selling system is so unreliable it’s deterring homeowners from selling – adding to the ongoing housing shortage crisis as a lack of suitable homes is one of the barriers to people moving up the property ladder.
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“Buyers need to have a little more skin in the game too. An earlier commitment – for example through reservation agreements – would go some way to avoiding these situations.”