Newly released data from professional cash buying company, Open Property Group (OPG), has disclosed that nearly a third of their property purchases in Q1 2023 were made to aid sellers whose previous sales had fallen through. Amidst signs of a steadying market, sale fall-through rates stood at a five-year peak at the year’s start.
The group, which specialises in direct cash purchases of properties, reported that 32% of their nearly £2m (£1,982,965) worth of purchases in the quarter were made to rectify broken property chains.
“Fall-throughs are one of the biggest threats to vendors during the sale process, often hindering them from proceeding with their subsequent purchase or plans, causing substantial stress. It can drastically affect the completion timeline and, in some cases, lead them to miss out on their ideal home,” said Jason Harris-Cohen, managing director of OPG.
He added: “In Q1 2023, we stepped in to help vendors mend broken chains, allowing them to maintain their course. Given that our process entails no estate agent or legal fees, clients were taken aback by the cost-effectiveness of our offer and the smooth, hassle-free procedure.”
Interestingly, the report indicates that 40% of OPG’s purchases came from individuals relocating, suggesting that cash sales aren’t solely driven by issues with properties.
Harris-Cohen remarked: “Vendors who’ve owned their properties for a substantial duration have the advantage of capital gains and, in some cases, being mortgage-free. We’ve noticed a surge in interest from people moving overseas, to regions with lower property prices, or aiming to downsize. For these individuals, where achieving the top asking price isn’t the priority, selling to a cash buyer streamlines the process, enabling quicker relocation.”
Breaking down OPG’s Q1 property purchases further, 12% involved properties with short leases, 9% were buy-to-let properties offloaded by landlords, and 7% came from vendors attracted by the advantages of selling to a professional cash buyer.
These properties, predominantly houses, were spread across different UK regions, including London, Milton Keynes, Exeter, Manchester, and Newark. The average purchase price stood at £116,645, with an average completion time of 33 days.
Notably, OPG witnessed a 16% uptick in cash offer requests compared to Q4 2022. The company’s strategy includes reselling properties through traditional estate agencies, at auctions, or via their investor network, while also keeping several buy-to-let properties within their managed portfolio.
As the property market shows signs of stabilising, Harris-Cohen noted an uptick in enquiries, especially from landlords looking to offload underperforming properties or entire portfolios due to rising legislative pressures, increased interest rates, and management costs.
“Given the fall in property prices and many buyers remaining tentative, those who need to sell are exploring alternative options. It will be fascinating to observe how these trends influence our next quarterly analysis,” he concluded.
