In the first quarter of 2018, 38.8% of house sales failed to reach completion. This is up from 34.9% during the first three months of 2017, and the highest house sale failure rate in over 10 years.
One of the main reasons for house sales falling through are buyers pulling out because they have changed their minds over purchasing the property. Some buyers pull out because they are frustrated by the time it takes for the house sale to complete.
Though many buyers receive an initial mortgage offer, this is subject to background checks and proof of earnings. If the background checks reveal a poor credit record or the applicant loses their job, the mortgage application may be refused and the house purchase may fail.
With the high risk of a house sale falling through, people who are dependent on the sale of their home to finance the purchase of a new home, need to have alternative financial plans. They should be prepared to take out a bridging loan if the sale of their existing house is delayed. This will require them to budget for the interest payments that they will have to pay on a bridging loan.
If a buyer knows that they are eligible for a bridging loan, and can cover the interest payments, they have the peace of mind in knowing that if their house sale fails, they can still go ahead with the purchase of their new property.