Various reports suggest that a number of buy-to-let landlords plan to exit the private rented sector due to concerns about the housing market, changes to tax and more stringent mortgage lending conditions, but selling a property can sometimes be easier said than done.
New research shows that more than 300,000 property transactions collapse every year costing affected sellers just over £2,700 on average.
The study, undertaken by YouGov, on behalf of the HomeOwners Alliance and homebuyer IMMO, found that most property sales fall through every year as a result of buyers changing their minds – collectively costing sellers a total of £400m annually.
According to the survey, which explored the experiences of home sellers, 20% of sellers have experienced a sale collapse, with just over half - 51% - incurring costs averaging £2,727.
Some 69% of the home sales that fell through did so because of buyer related reasons, including the purchaser changing his or her mind, while the often lengthy time it takes to complete a transaction led to 39% of buyers pulling out of an agreed deal because they found another property, while more than a quarter - 28% - of deals fell through because the buyer’s finances were not in order.
Sales falling through further up in a chain accounted for 20% of collapsed sales.
The research, which found that uncertainty may actually put people off selling, shows that almost one in ten sellers - 8% - with a failed sale have experienced gazundering; where the buyer lowered their offer just before the exchange of contracts.
Paula Higgins, chief executive of HomeOwners Alliance, commented: “We often hear about would-be buyers losing their dream homes as a result of sellers accepting higher offers but less is said about sellers forking out thousands in wasted fees only for buyers to change their mind, leaving the seller back at square one”.
“Gazundering and time wasting is a huge problem. The homeselling system is so unreliable it’s deterring homeowners from selling – adding to the ongoing housing shortage crisis as a lack of suitable homes is one of the barriers to people moving up the property ladder.”
The research comes after the government announced plans to improve the home buying and selling process with a number of measures, including the introduction of voluntary reservation agreements.
These legally binding agreements, advocated by HomeOwners Alliance, would require both buyers and sellers to put down a non-refundable deposit to commit both sides earlier in the process.
Commenting on the findings, Samantha Kempe, Co-Founder of IMMO, said: “The current system has created a fundamental power imbalance between the seller and the buyer, with the seller often at the buyer’s mercy during what is often the largest financial decision of their lives.
“Sellers should be able to proceed with the sale of their property knowing what price they will receive and feeling assured that the sale will go through.”
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we are a country full of time wasters, dreamers and flash with no cash, this is why more and more properties end up in auctions.
Major frustrations in buying properties and the reasons I have pulled-out of purchases are poor communication and time taken by both Estate Agents and Solicitors
David it is NOT the estate agents causing the problems it's the lawyers with poor communication skills. They think in many cases it is beneath them to talk to an agent. Many agents are not trained in sales and as a result do not know the questions to ask or the answers they should expect to hear from solicitors. Don't paint the agents with that brush instead I suggest that you do some days in agents offices listening to the way they try to conduct business with a solicitor who does not want to communicate.
Beg to differ, out of five Estate Agents in my immediate area two could not communicate to save their lives. One of them I pulled-out of a sale after five weeks of not hearing from him. If I were to spend any time in an Estate Agents, would introduce basic communication skills and account management recording. An example of how bad their skills are, my Son and his wife (Mr & Mrs) sold their house last Saturday, the Estate Agent sent an email address to Miss!
Totally agree with your comment on Solicitors, however last year dealt with five different Solicitors, all crap! there must be a quicker and cheaper way of legalising the sale and purchase of property.
Odd article...........headline says Gazumping on the increase, I think they mean Gazundering.
Gazumping is on the rise as more than 300,000 property sales collapse? I think this is the wrong Headline as there no figures stating gazumping is on the rise. and Its a buyers market !!!!
Once a sale is put together it is in the hands of the solicitor NOT the agent. Yes the agent should check out the chain and buyers position, but if they are lied to not much that can be done? The problem is the transaction took three months 30 years ago. We now have email etc and it still takes 3 months ! The transaction only goes as fast as the slowest the solicitor!
Let's not forget, most of people in UK always on holidays, in a more provincial areas, they (in this case are solicitors, administrators and block management, secretaries in the management who provide documentation to solicitors) work in a slow motion if they are not on holidays, believe me, it will take more or less 3 months to complete a purchase process. Strike while the iron is hot. When you lose the favourable condition, you lose the deal. As one of us just said, we are dreamers in UK.
I am not going to tell you who my solicitor is because he is very good with property and right now he is working on a sale for me! He is an active owner himself. I have suffered from useless solicitors myself but have found ways around it.
First ask your solicitor to prove to you they are good at it! It's that simple.
Less obviously, ask the neighbours near a property you want to purchase if they know the sellers. If you are lucky you will be able to contact the seller, off the record of course, and you can sort out, "What the hell is going on". Once I was even told that I could borrow the key they still had!
It is also possible to ask an estate agent to make a recommendation. This used to be frowned on but you only need a hint in the right direction. The estate agents wants their fee as well and if they themselves are any good they will have local knowledge.
A lot of mortgages come with free conveyancing. I was dubious but have had very good results. No doubt the mortgages companies don't want failed sales either. Find a buyer who has such a mortgage offer.
My experiences are do not work with the law firm connected with letting agents, do not use the solicitors connected with the sales agents. They are not on the side of your advantages and benefits, they are always and only on their own side.
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