Why high demand for homes drives risk - read more from Jameson and Partners Estate Agents in Altrincham

Why High Demand for Homes drives Risk


Why High Demand for Homes drives Risk

Did you know? When there is a high demand for homes, there is a greater risk of property sales falling through? Recent reports cite a near return to normal within the property market as one in three property sales in England and Wales fell through before completion. It sounds bad, but it’s actually quite normal. We find out why and look at what you can do to prevent a property sale from failing. Read more…

The facts behind the numbers
The data, which comes via property sales company Quick Move Now shows that in the final three months of last year, 34% of property sales fell through before they reached completion. In the three months before that, Q3 of 2021, the figure was as low as 11%. So, why was it so high at the end of the year? And why did we all enjoy a period when the number of property sales falling through were few and far between?

Well, if we go back to the months from July to September, there was extremely high demand for homes with a shortage of properties on the market. Although that’s no different to the market right now, the stamp duty holiday played a big part. Back then, buyers were trying to push purchases through so they could capitalise on the stamp duty holiday. Buyers couldn’t take the risk on property sales falling through as there were so few other options around. That or they would face an expensive bidding battle on other properties. So, sales sailed through, in record numbers.

The average is about right
On a national level, the 34% fall through rate is about right. This is an indicator that the market is settling down. Last year, we saw a lot of very high offers, you might go so far to say impulsive offers on properties. It was all done to secure a property before someone else came along to snap it up. If you lost out, it was very difficult to find something else.

The difference is now, people are putting in those high offers as choice is limited, but they are going away and thinking about them afterwards. Is the property worth that price? Is it really the right property for them? What do living costs look like further down the line?
When you look at the 34% figure, 50% of those sales fell through because a buyer changed their mind or tried to renegotiate an offer. The issue of gazumping accounted for 28% while survey or mortgage issues accounted for 14%.

High demand for homes drives prices
As we all know, it’s the shortage of housing stock which drives the high demand for homes, and in turn, house prices. Until such time as there are enough homes to meet demand, prices will continue to increase. And in turn, there will be buyers who might find the reality of buying a home too expensive. But other factors can change people’s minds once they have started on the road to buying a property. Economic and political stability are such factors. This year especially, with high levels of inflation and interest rate rises due, we expect a little more caution around buying.

But let’s face it, the end of year figures last year were nothing as bad as they were back in 2018. At the end of 2018, the Q4 figures for the fall through rate were a whopping 49.8%! However, over the course of the whole year in 2018, the average was lower, with 30.6% of sales falling through before completion. The sharp rise at the end of the year came down to political uncertainty. It just goes to show how easily the market can change.

Our recommendations to avoid losing a property sale
When you look at the local market, demand remains as high as ever. The year has started with gusto. We have received many enquiries for properties across the Altrincham, Sale, Timperley, and Hale regions. We expect this to remain the same throughout the year. Although, perhaps slightly fewer people braving a move until prices calm somewhat.
When it comes to selling your home, here at Jameson and Partners, we pride ourselves on being realistic with our customers. Yes, there is a high demand for homes, but it doesn’t mean you should over inflate the true value of the property you are selling. Doing this is a sure fire way of seeing a sale collapse further down the line.

We value properties taking everything into consideration. This might mean your property doesn’t come in at the top end of the price scale. Many local agents look to impress sellers with the highest valuation, but it doesn’t always equate to a guaranteed sale. Being realistic with the price means you’ll likely get more offers.  And the chances of actually selling your home, which is after all your main goal, will be higher.

To sell your home with Jameson and Partners in 2022, contact one of our team today and arrange a free property valuation. Our experienced team know the area and can give you a realistic idea of what your home is worth. Contact us today.