England's economy is losing more than £900 million a year due to property transactions collapsing before completion, according to new data.
Analysis by property portal Rightmove indicates that nearly £392 million in potential estate agency revenue and £515 million in stamp duty were lost last year alone, stemming from sales that fell through and did not re-enter the market within a 12-month period.
The economic impact extends beyond England, with Scotland missing out on a potential £7 million and Wales approximately £23 million from similar lost sales.
These separate calculations account for Scotland's comparatively lower rate of transaction fall-throughs and the distinct land tax systems in place across Scotland and Wales.
Last year, it took an average of five months for a house purchase across Britain to go through the completion process, Rightmove said.
Rightmove’s data indicates that 6 per cent of property transactions fall through and do not come back to market within 12 months, while around a fifth (23 per cent) of transactions initially fall through before later completing successfully.
Johan Svanstrom, Rightmove’s CEO, said: “Our analysis highlights the scale of the economic opportunity if fall through rates can be reduced.
“More than one in five transactions are affected by fall throughs, costing agents either lost or delayed fees and leading to some home movers paying thousands in repeat costs.”
Rightmove used HM Revenue and Customs (HMRC) house sales figures and its average transaction price data to make its estimates for the amount of money being lost. It also took into account transactions where stamp duty relief for first-time buyers may have been applied.
Craig Webster, managing director at Tiger Estates in Blackpool said: “The true cost of those collapsed transactions goes far beyond a single lost fee.
“When a sale falls through, the agent has already invested substantial time and cost in securing the listing, marketing the property, vetting and managing buyers, and progressing the sale through to and beyond offer stage.
“Anything that improves transaction efficiency – particularly in conveyancing and data flows between parties – will reduce the risk of fall throughs.
“Faster, clearer communication between agents, lenders, solicitors and buyers builds confidence throughout the chain and helps prevent delays from snowballing into cancellations.
“At the same time, accurate pricing and early legal preparation for vendors are practical steps agents can take to better manage their own risk and give buyers greater clarity early in the process.”
Mary-Lou Press, NAEA (National Association of Estate Agents) Propertymark president, said: “While fall throughs can never be eliminated entirely, many are preventable with better upfront information, improved communication between parties, and a more streamlined and digitised transaction system.
“Our member agents work tirelessly to hold chains together and guide consumers through what is often a complex and stressful process.”
She added: “We support measures that promote greater digitisation, earlier provision of material information, and stronger collaboration across the sector.
“However, reform must work for consumers and practitioners alike, ensuring the system is both efficient and robust.”
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