When it comes to purchase work particularly, I can guess that there is always an element of, ‘Will this complete?’ for advisers when it comes to any transaction.
Fall-throughs might be viewed by advisers who have been around the course a number of times as part of the job and a necessary evil, but I can imagine that it is never a nice aspect of the job to have something you have worked on not come to fruition.
Now of course I understand that this doesn’t necessarily mean your client is never going to purchase. Far from it. The likelihood is they will find somewhere else to buy and it will eventually complete, paying you the money you’ve earned from working on that case.
However, as we know, the market moves quickly and it is more than likely that you’ll need to ‘rebroke’ that client, and again you have to wait a longer time for a second, or even third, potential purchase to complete.
As I understand it, purchases are – on average – taking around 24 weeks to complete from the marketing of the property, so it’s understandable why there is a huge amount of frustration around those that don’t.
If a transaction falls through after a couple of months, you’re likely to be waiting another six months on top of this for completion. That’s eight months working on the case, with no further guarantee that it will actually happen.
Just recently the House Buyer Bureau (HBB) released some statistics suggesting that while there has been a quarterly reduction in the volume of fall throughs and therefore the cost to all concerned, it still meant that over £1bn was lost in 2022 due to aborted transactions.
That is a phenomenal amount of wasted cash, investment, time and resource to get to no outcome, and when so many stakeholders within the housing market are completely reliant for their income on completion, then it seems an obvious point to make that you need to maximise your income from every single transaction that does make it through the process.
For an outsider looking in at this, they might well be wondering why so many housing transactions do complete – over one million last year – given the obstacles and hurdles that we all have to get over, and the heightened chance that something will go wrong throwing a real spanner in the works.
According to HBB, on average, over £3.3k is lost every time a property sale/purchase falls through, and from my reading of this, that’s purely the cost to the individuals involved, not those professionals who miss out on their income.
There’s two things at play here. Firstly, the ongoing work to try and speed up the home buying/selling process and to ensure less aborted transactions is not just necessary but absolutely vital for all of us stakeholders, and we should all be supporting the delivery, for example, of more upfront information, less duplication of tasks, increased use to technology in areas like ID verification, etc.
But, while we slowly move to a better process, it’s also crucial that advisers make the most of every single client they see and be in a position to offer them advice, services and products across all manner of needs, not just the mortgage.
Again, if you’re only offering mortgage advice and that mortgage doesn’t happen, then you lose everything, whereas if you can active in mortgages, protection, GI, conveyancing, legal services, and others, then you can not only mitigate against the mortgage/purchase not happening, but when/if it does, you are developing a range of other income streams that are going to bear fruit.
It’s obviously so important that each and every adviser is actively in a position to support clients right across the piece because this will embed value in the business, maximise income, and also ensure the client has no need to go elsewhere.
It’s my hope that, as we move into the future, that fall-through rate will reduce dramatically and we are all provided with much more certainty about transactions completing, with all the benefits that can clearly provide to both advisers and their clients. In the meantime make the most of every single client and opportunity you get.
Mark Snape is chief executive officer of Broker Conveyancing
