Homeowners lose £400 million per year due to broken property transactions
A new study has revealed that people selling their homes in the UK are losing over £400 million each year due to potential buyers pulling out at the eleventh hour.
The research, a collaboration between the HomeOwners Alliance and IMMO, found that over 300,000 sales fall through each year due to broken links in the property chain. This cost 51 per cent of those homeowners affected in excess of £2,700. One in 10 had lost more than £5,000.
The study pinpointed ‘gazundering’ as a driving force behind the number of collapsed property sales. This is the practice of lowering an offer to buy, just prior to exchanging contracts.
Of those that took part in the survey, 65 per cent backed the idea of non-refundable deposits via a reservation agreement to lock both parties into the deal earlier on in the process. Meanwhile, 34 per cent said that the risk of a property chain collapsing would put them off selling their property.
The chief executive of the HomeOwners Alliance, Paula Higgins, said: “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 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.”