It is one of the most common but frustrating parts about trying to buy or sell a home, and according to reports it’s on the rise…property chains are falling through.
As we know, record property sales and skyrocketing house prices have dominated the headlines, however, data released from Quick Move Now indicates that the high-pressure property market is leading to an increase in the number of property sales falling through.
Their figures suggest that more than one in five property sales fell through between April and June this year because of buyers trying to lower their initial offer after a sale had been agreed, or because they got cold feet and decided to pull out of the sale entirely.
In the first quarter of 2021, 12 % of failed sales were attributed to the buyer trying to lower their offer or getting cold feet. In the second quarter of the year, that figure almost doubled to 22 %. Quick Move Now says over the last quester they have also seen the race to beat the final stamp duty holiday deadline, with 11 % of sales falling through because the buyer or seller felt the sale was not progressing quickly enough to meet this deadline.
In another report, Propertymark says that agents are seeing property chains falling through due to the additional 2% stamp duty charge applicable to non-UK residents.
From 1 April 2021, homes bought in England and Northern Ireland by non-UK residents attract an additional 2% stamp duty charge on top of the rate that applies to purchases made by UK residents and this seems to be causing much confusion and having an impact on sales.
Overseas buyers are now being treated as non-UK residents if they were not present in the UK for at least 183 days during the 12-months before their purchase.
Many foreign buyers will fall into this category due to travel bans and, as such, are now subject to the additional 2% stamp duty charge. Case studies show many are unaware of the charge until they have progressed through a transaction.
Reports from agents, predominantly in London, say they have seen a dramatic drop in the number of overseas property buyers.
Finally, it would seem as the demand for property outpaces supply, gazumping, the term used to describe the process of a seller accepting an offer to later reject it for a higher offer from another buyer, has also returned. Meaning the original buyer has to start all over again and this can in turn impact the sale of their own property.
So to re-cap, it would seem there are a number of factors all at play which are causing property chains to collapse:-
- Buyings lowering their offer after an offer is agreed
- Buyers getting cold feet and pulling out
- Sales not progressing quickly enough to meet the stamp duty deadline
- The return of Gazumping
- Additional 2% Stamp Duty for non-UK residents
If you think your chain could be at risk because a buyer wishes to pull out, WeBuyProperty buys properties for cash and can transact in a matter of weeks. To talk through your personal circumstances and get some no-obligation advice, please contact us on:
Phone number: 0207 449 9797 Email: info@webuyproperty.com