A change of mind from either buyers or sellers are behind almost a third (29%) of all property transactions that falling through before exchange, research from home move comparison site reallymoving.
The research also revealed widespread consumer support for the government’s proposed Reservation Agreements, which are likely to be trialed in early 2020, with 67% of buyers and sellers believing they would have benefited from the agreements, indicating frustration at the lack of consequences for parties that cause the collapse of property sales.
The survey of 574 customers who used reallymoving for conveyancing quotes between 1st July 2018 and 1st July 2019 revealed that two out of every three buyers and sellers (67%) have experienced a fall through in the past 12 months.
Additional reasons included a problem discovered in the survey (17%) and difficulties obtaining mortgage finance (15%). Other common reasons for fall throughs include issues arising up or down the chain, gazundering, gazumping, problems in the legal process and the transaction taking too long to progress.
Rob Houghton, CEO of reallymoving, said: “The system for buying and selling property in England and Wales is fundamentally unfair, requiring both buyers and sellers to commit considerable sums of money to a process in which they are entirely unprotected.
“People are also forced to make life-changing decisions about moving to a new area, perhaps changing jobs, children’s schools and so on, while at any moment the other side can pull out of the deal without consequence.
“To save the millions of pounds wasted through collapsed deals every year and to foster renewed trust between buyers and sellers, change is urgently required. Reservation Agreements, which would require both sides to part with a lump sum of cash at the point an offer is agreed, would undoubtedly prompt people to think hard about their commitment to the process, which can only be a good thing.
“The devil will be in the detail however and there will need to be clear guidelines outlining what exactly constitutes a genuine reason for withdrawing from a sale.”