Homeowners in the UK are seeing more than 300,000 property transactions fall through, costing £400 million, according to a report out today.
This equates to one in five sellers losing out on a property transaction before completion at a cost of £2,700 each, largely due to broken chains with 69% of collapsed sales down to buyers changing their minds.
When a house sale falls through, it costs the homeowner more than just wasted time and frustration.
The study by consumer group the HomeOwners Alliance found that just over half of sellers (51%) incurred financial costs averaging £2,727, and more than one in 10 (12%) were forced to shell out more than £5,000. These costs included legal/conveyancing fees (23%), legal searches (13%) and surveys on purchase properties (15%).
On average, 21% of the sellers’ additional costs were caused by ‘gazundering’, where the buyer lowers their offer just before completion, in the hope of forcing the seller to accept less. Gazundering was reported by almost one in 10 of sellers (8%).
Commenting on the findings, Paula Higgins, chief executive of the HomeOwners Alliance, says: “Gazundering and time wasting is a huge problem. The home-selling 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.”
Unsurprisingly, sellers are less than happy: 80% of the 2,000 people polled say they would like to see buyers provide proof of funds before they can put in an offer, and 65% support the idea of voluntary reservation agreements – legally binding agreements that require buyer and seller to put down a non-refundable deposit.