Blackpool estate agent speaks out on £900m 'true cost' of failed property sales
A local estate agent discusses the major economic impact of property sales that fall through, as new data reveals significant lost revenue.
A Blackpool estate agent has spoke out about the ‘true cost’ of failed property sales, as Rightmove calculates more than £900m is being ‘missed’ nationally by sales falling through.
Rightmove estimated that, in England, nearly £392 million in potential estate agency revenue and £515 million in potential stamp duty were lost last year to fall throughs that did not come back to market.
The online property experts’ data indicates that 6% of property transactions fall through and do not come back to market within 12 months, while 23% of transactions initially fall through before later completing successfully.
Discussing the impact of collapsed transactions, Craig Webster, managing director at Tiger Estates in Blackpool said the ‘true cost goes far beyond a single lost fee’.
He explained: “When a sale falls through, the agent has already invested substantial time and cost in securing the listing, marketing the property, vetting and managing buyers, and progressing the sale through to and beyond offer stage.”
Rightmove used HM Revenue and Customs (HMRC) house sales figures and its average transaction price data to make its estimates for the amount of money being lost. It also took into account transactions where stamp duty relief for first-time buyers may have been applied.
Jon Svanstrom, Rightmove’s CEO, said: “Our analysis highlights the scale of the economic opportunity if fall through rates can be reduced.
“More than one in five transactions are affected by fall throughs, costing agents either lost or delayed fees and leading to some home movers paying thousands in repeat costs.”
Craig Webster suggested that improving transaction efficiency - particularly in conveyancing and data flows between parties – will reduce the risk of fall throughs.
“Faster, clearer communication between agents, lenders, solicitors and buyers builds confidence throughout the chain and helps prevent delays from snowballing into cancellations,” he explained.
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“At the same time, accurate pricing and early legal preparation for vendors are practical steps agents can take to better manage their own risk and give buyers greater clarity early in the process.”
A Ministry of Housing, Communities and Local Government (MHCLG) spokesperson said: “Buying a home is for many people the most important purchase of their lives, but the current system is not working.
“That’s why we’re committed to transforming the home buying and selling process over the course of this parliament. We’ve consulted on how to improve the system and will set out next steps in due course.”