Recently published data reveals a somewhat unsettling trend in the UK’s housing market. The property sales failure rate, which is the percentage of property sales deals that do not proceed to fruition, stood at a whopping 27% in the third quarter of the year, casting a shadow on a quarter of all property transactions.

Stumbling Blocks in Property Deals: What the Numbers Say

Figures available show that not only did more than a quarter of property transactions collapse in England and Wales from July to September this year, but there were a variety of reasons contributing to this problem.

The majority, a substantial 58% of the failed sales, were the result of shifts in the buyer’s circumstances or the buyer having second thoughts and backing out of their initial offer. This could be due to any number of unforeseen turns or life changes that may occur between putting in an offer and reaching the completion date.

Chain-Break Woes and Financing Hiccups

It’s also worth noting, a full 25% of disturbed deals were thanks to a chain-break, a commonly dreaded situation where a linked property transaction fails, causing a domino effect that cripples transactions down the line. Additionally, 8% of the sales fell through due to hurdles in securing a mortgage.

Some sales, which did not fit into these categories, were caused when the seller opted out of their agreement, lured by a larger offer from another prospective buyer.

Changing Mortgage Rates

Buyers who might have made offers on properties in the second quarter of the year, planning their finances based on mortgage interest rates below 5%, could have found themselves in a tricky spot. They would have been thrown off-balance when they discovered that rates had risen by over 1.5% during their application process for a mortgage.

This shift in mortgage rates is shown in the 8.3% of failed sales caused by difficulties in securing a mortgage, reflecting the subsequent financial strain that buyers may have found themselves under.