The total cost of fall throughs increased for the fifth year in a row
The total annual cost of fall throughs to UK homebuyers and sellers topped £1 billion in 2022, a 6.3% increase on the previous year, according to the latest research by property purchasing specialist House Buyer Bureau.
Analysis of the fall through data across the UK property market revealed that despite a quarterly reduction in both the volume and cost of the average fall through in Q4 2022, the total cost of fall throughs increased for the fifth year in a row, rising by 75% on the 2018 figure.
The latest index for Q4 2022 showed that a cooling housing market did present a silver lining in the form of a reduction in fall throughs. Based on the latest quarterly figures, 75,809 homebuyers and sellers were subject to a property sale collapse, a 15.9% drop on the previous quarter as market activity started to slow.
The cost associated with a property fall through also fell marginally by 0.8% to an average of £3,311. As a result, the total cost of sales to have collapsed during the final quarter of last year totalled just shy of £251 million, a substantial figure, but one that sat 16.6% below the previous quarter.
However, while there may have been a reduction in both volume and cost on a quarterly basis, the number of fall throughs seen in Q4 2022 were still 16.9% higher on an annual basis, with the average cost up 11.4%, while the total quarterly cost was also up 30.2% versus Q4 2021.
“There’s no denying that the market has now started to cool, and while this may bring its own concerns, a reduction in both sales volumes and house prices during the final stages of last year has, at least, seen a drop in the number of transactions that are collapsing on a quarterly basis, as well as a reduction in the cost incurred by buyers and sellers,” Chris Hodgkinson (pictured), managing director at House Buyer Bureau, commented. “There is, of course, a seasonal element at play here as well, with the final months of the year traditionally bringing a lull in market activity.
“However, this quarterly market gauge of instability not only remains higher when compared to the final quarter of 2021, but when viewing 2022 as a whole, the total cost to the industry has also continued to climb, breaching the £1 billion threshold.”
Hodgkinson added that it would be interesting to see the figures for the first quarter of 2023 as it was predicted that the market would stand fairly firm.
“It could well reverse the current downward trend in fall throughs as buyers and sellers return to the fold and market activity increases,” he said. “When you also consider the additional volatility caused by the cost-of-living crisis and increasing cost of borrowing, we expect this will probably be the case.”
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