By The latest industry index on property fall throughs has revealed that there has been a sharp increase in both the number of property transactions falling through in Q3 of 2022, as well as the cost associated with these fall throughs.
The latest index shows that in Q3 of last year, 90,188 transactions are estimated to have fallen through, a 15.6% increase on a quarterly basis and a 3.6% uplift versus this time last year.
This is also the highest quarterly number of fall throughs recorded over the last five years.
What’s more, a combination of runaway inflation and increasing house prices have pushed the average cost of a property transaction collapse to £3,337.
As a result, it is estimated that homebuyers and sellers were hit by a total estimated cost of almost £301m as a result of their transactions falling through in Q3 2022.
This total cost is not only 18.7% up on the previous quarter, but also 16.3% on an annual basis.
There is one silver lining for the nation’s buyers and sellers, as the producers of the index, House Buyer Bureau, estimates that the total number of fall throughs seen in 2022 will still sit some -6.7% below the total seen in 2021.
However, this is largely down to the fact that the first two quarters of the year saw a far lower level of transactions falling through, with the latest quarterly spike suggesting that the property market could be in for a rougher ride in 2023.
Managing Director of House Buyer Bureau, Chris Hodgkinson, commented:
“We’ve seen a consistent increase in the number of property transactions falling through in recent years and despite a fairly settled start to 2022, the latest data shows that the number of sales collapsing hit a five year high in the third quarter of 2022.
This is almost certainly due to the turbulence that came via the mortgage sector in September, as lenders pulled a raft of products and increased mortgage fees in reaction to the Bank of England’s aggressive attempts to curb inflation via a string of consecutive interest rate increases.
As a result, many buyers found that they could no longer afford the cost of borrowing which has led to swathes of property sales falling by the wayside during the second half of last year.
Unfortunately, we saw a further hike to the base rate come in December and so the likelihood is that this increased level of property fall throughs will not only be apparent within the final quarter of 2022, but it’s likely to be maintained into 2023.”
| Quarter/Year | Est number of fall throughs | Est average cost of fall through £ | Est total cost of fall throughs to property market by quarter | Est total cost of fall throughs to property market by year |
| Q1 2018 | 50,000 | £2,700 | £135,000,000 | £588,600,000 |
| Q2 2018 | 58,000 | £2,700 | £156,600,000 | |
| Q3 2018 | 59,000 | £2,700 | £159,300,000 | |
| Q4 2018 | 51,000 | £2,700 | £137,700,000 | |
| Q1 2019 | 60,491 | £2,761 | £167,015,651 | £770,966,574 |
| Q2 2019 | 71,555 | £2,761 | £197,563,355 | |
| Q3 2019 | 76,401 | £2,761 | £210,943,161 | |
| Q4 2019 | 70,788 | £2,761 | £195,444,407 | |
| Q1 2020 | 66,602 | £2,812 | £187,284,824 | £839,888,160 |
| Q2 2020 | 77,359 | £2,812 | £217,534,445 | |
| Q3 2020 | 77,359 | £2,812 | £217,534,445 | |
| Q4 2020 | 77,359 | £2,812 | £217,534,445 | |
| Q1 2021 | 86,375 | £2,973 | £256,792,875 | £969,468,543 |
| Q2 2021 | 87,817 | £2,973 | £261,079,941 | |
| Q3 2021 | 87,063 | £2,973 | £258,838,299 | |
| Q4 2021 | 64,836 | £2,973 | £192,757,428 | |
| Q1 2022 | 71,613 | £3,141 | £224,936,433 | £779,374,205* |
| Q2 2022 | 78,042 | £3,248 | £253,480,416 | |
| Q3 2022 | 90,188 | £3,337 | £300,957,356 | |
| Q change % | 15.6% | 2.7% | 18.7% | – |
| Annual change % | 3.6% | 12.2% | 16.3% | -19.6% |
| *Total annual fall through cost for 2022 based on Q1 to Q3 only – latest available data | ||||
| Year | Est fall throughs | Annual Q change n | Annual Q change % |
| 2019 | 279,235 | – | – |
| 2020 | 298,680 | 19,445 | 7.0% |
| 2021 | 342,778 | 44,098 | 14.8% |
| 2022 est | 319,791 | -22,987 | -6.7% |
Fall through volumes sourced from TwentyCI
Est average cost of fall through based on source value and vs house price, as well as estimated according to inflation increases and legal fee increases (Sources: Smoove, Homeowners Alliance, Property Rescue, Home Selling Expert)
Total cost of fall throughs to property market based on the average cost of a fall through x estimated number of fall through transactions
Comments