What Affects Property Sales the Most in 2022?

It is frantic, it is unpredictable. It is frustrating.

It is the housing marketplace in the UK in 2022. Whilst we are enjoying one of the hottest weeks on record in terms of weather, the marketplace for available homes continues to be scorching hot. For every person who successfully finds a home and moves in, there could be 20 people getting a bit hot under the collar on the waiting list.

However, almost a third of property sales that collapsed during the second quarter has been a major focus this past month, and the reveal that the third was a result of tougher criteria by lenders, with 31% falling through between April and June before completion

Refusal of Funds

Of the collapsed sales, 30% failed due to the refusal of funds by mortgage companies to buyers, suggesting a growing caution from lenders.

Half of the failed sales during the second quarter were down to buyers changing their minds and pulling out in pursuit of alternative properties – or pulling back following unfavourable survey reports. The remaining 20% circled gazumping or buyer circumstance changes.

In this day and age, it is certainly unusual for buyers to have an offer accepted on a property without an agreement in principle in play with a mortgage lender. This would point to the 30% of failed sales being the result of the difficulty in securing a mortgage with buyers being turned away during their formal mortgage application, following an agreement in principle.

Strict Against Risk

The indication that underwriters are getting more strict in their levels of acceptable risk, in terms of both buyer circumstances and financial picture – as well as properties they are prepared to lend on.

The fall-through rate has remained stable in the first half of 2022, falling just 1% in the first/second quarter. The reasons for the failed sales certainly are painting a picture of the challenges faced by the property market – with growing inflation and cost of living making it inevitable that lenders and buyers would begin the process of greater caution.

The delays in the conveyancing process are also resulting in increasing numbers of buyers applying for extensions to their mortgage offers out of necessity. Those offered a mortgage to buy property in Stockport may have found themselves unable to secure extensions to their offer, even without changes to circumstances.

Outlook

With lending criteria toughening up, difficulty around securing mortgage finance is something that may be around for many more months to come, not only affecting those trying to purchase a home but also having a knock-on effect on those looking at how to sell a house in this climate.

For more news on available properties and advice on buying or selling a property, contact the team at Joules Estate Agents Stockport today.

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