Fall-throughs have costed home sellers an estimated £909m in 2023, new research from Home Sale Pack has revealed.
Home Sale Pack analysed residential fall-through data from TwentyCI and measured it against the estimated cost of a collapsed sale.
The data revealed that in 2022, there were 312,770 fall-throughs in the residential property market.
With each fall-through estimated to have cost the seller an average of £3,229, the total cost of fall-throughs was just over £1bn for the year.
In 2023, higher bank rates meant that the average cost of a fall-through increased by +4.3% to average £3,369.
Despite this increase, quieter market conditions and a drop in buyer activity levels resulted in the total number of fall-throughs seen in 2023 dropping by -13.8% to total 269,728.
As a result of this reduction in fall-through volumes, the total cost of fall-throughs dropped by -10.1% in 2023 to sit at a total of £909m.
But with mortgage approval numbers now on the rise for five consecutive months in a row, it’s clear that market activity is picking up as buyers gain more confidence in the economy and come to terms with the new normal of higher mortgage rates.
While a positive for the market as a whole, Home Sale Pack has said this surge in activity could well see the number and total cost of fall-throughs rise once again.
Ruth Beeton, co-founder of Home Sale Pack, said: “Fall-through numbers for 2023 appear to show an improvement for the industry.
“Fewer fall-throughs would suggest a more efficient market, but we know that this isn’t really the case.
“Instead, the numbers are down because market activity slowed significantly during 2023, with the cost-of-living crisis and rising interest rates forcing many would-be buyers to postpone their searches and weather the storm.
“However, the Bank of England is now showing that mortgage approval numbers are on the rise, with strong growth over the last five months. This suggests that market activity is about to surge as more and more buyers decide to revisit their buying ambitions.”
Beeton concluded: “This means the real true test of our industry’s ability to keep fall-through numbers at a minimum is now arriving at our doorstep, and unless we make concerted efforts to improve the way the conveyancing and wider home selling process works, I suspect the data will not be pretty.”
