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Proportion of failed property transactions rises

Friday, 15 July 2011 2:33 PM

Almost a third of residential property transactions fell through in the first six months of the year, according to figures released today.

Research by conveyance firm 1st Property Lawyers suggested that the number of transactions that fail before completion has been rising steadily in recent times.

The proportion of sales that have been aborted has increased over the past three years, the firm said, from 21 per cent of all transactions in 2009 to this year’s figure of 29 per cent.

The research identified the key reason for aborted transactions as sellers withdrawing their properties from the market, which accounted for 39 per cent of sales aborted this year – an increase of four per cent since 2009.

1st Property Lawyers said the elimination of Home Information Packs (HIPs) in the second half of 2010 was another major factor in the increase, as sellers are now able to test the market without having to pay any upfront costs bar the Energy Performance Certificate (EPC).

This has paved the way for less serious sellers to market their properties in the hope of achieving inflated prices, it added.

Buyers pulling out of the purchase accounted for 23 per cent of aborted sales, the research said, primarily driven by nervousness in the market place about house prices.

Mark Montgomery, commercial director of 1st Property Lawyers, said: “It is worrying that at a time when transactions are at an all-time low, the number of fall-throughs is increasing as nervousness in the market prevails.”

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