Despite a quarterly reduction in both the volume and cost of the average fall through in Q4 2022, the total annual cost to UK homebuyers and sellers topped £1bn in 2022, a 6.3% increase on the previous year, according to House Buyer Bureau (HBB), which specialises in buying property at a discount.
In a bid to encourage more vendors to use its service, the ‘quick buying’ property firm says that it has analysed the number of transaction fall throughs across the UK property market, to assess what this means in terms of the average cost of a fall through and what the total cost to the property market is as a result.
The latest index for Q4, 2022, shows that a cooling housing market did present a silver lining in the form of a reduction in fall throughs. The latest figures show 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 £251m, 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.
The index by House Buyer Bureau also shows that the total cost of fall throughs endured by the nation’s home sellers and buyers totalled just over £1.03bn throughout 2022 as a whole.
The MD of House Buyer Bureau, Chris Hodgkinson, commented: “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.
“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 £1bn threshold.
“It will be interesting to see where we sit during the first quarter of 2023. It’s predicted that the market will stand fairly firm which could well reverse the current downward trend in fall throughs as buyers and sellers return to the fold and market activity increases.
“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.”
