Homebuyers waste £2k on failed property transactions
One in three home buying transactions fell through in the last year, with potential owners wasting almost £2,000 on associated costs, analysis reveals.
Average legal fees have risen 11% or £140 in the last year, from £1,273 to £1,413. Meanwhile homebuyer surveys cost £525 on average, up from £465 in the previous year, according to conveyancing software provider Smoove.
Based on its own data, a third of planned purchases have fallen through in the last year, meaning potential homeowners have wasted £2,000 in associated costs.
Reasons for transactions falling through include gazumping, sealed bids, and the house buying frenzy fuelled by the stamp duty holiday.
As part of its inaugural Home Movers Report which tracked the cost, time and emotional impact of moving home, it also found homeowners spent an average £1,640 on unforeseen moving costs.
Further, the average UK stamp duty cost has also risen from £5,302 to £5,502 year-on-year.
Booming housing market
Despite 34% of planned purchases falling through, new instructions were up by more than a third (36%), year-on-year. When broken down by first-time buyer activity, Smoove said the number has risen even higher, by 54% annually.
This surge in demand has caused a supply crunch, which has impacted house prices and mortgages. According to Smoove’s data, the average remortgage value is £390,647, up from £352,900 the previous year.
The length of time to buy also crept up. Within the last six months, the average time to complete was 153 days, the equivalent of more than five months. Compared to 2019, before the pandemic, this number was 124 days – an increase of 23%.
Smoove said the increase was most likely a result of the post-lockdown boom, as changing consumer lifestyles and demand outweighed supply, combined with greater capacity constraints for solicitors, and local authority searches taking longer to complete likely due to a backlog.
Jesper With-Fogstrup, chief executive of Smoove, said: “Home moving can often be an agonising, horribly stressful experience. The fact that few would argue with this speaks to a failed system.
“One in three home buying transactions should not be falling through. This figure represents tens of thousands of broken dreams and huge sums of money essentially poured down the drain. Creating more certainty around property transactions is essential. It will probably require legislative reform to provide greater protection to buyers and sellers once offers have been accepted.”