Almost three in 10 homebuyers are making offers without being in a position to proceed, increasing the risk of delays and fall-throughs for sellers, new research shows.
A study by House Buyer Bureau found that 29% of buyers who made an offer did not have the necessary finances or mortgage arrangements in place.
The survey of UK buyers who purchased within the last 12 months highlights widespread gaps in preparedness at both enquiry and offer stage.
More than half (55%) said they did not have a mortgage in principle when they first started viewing properties.
ADDITIONAL FUNDS
Even when making an offer, many remained underprepared. Of the 29% not ready to proceed, 7% lacked sufficient funds for stamp duty and costs despite having a deposit and mortgage agreement, while 2% had neither deposit nor additional funds in place.
A further 16% had sufficient savings but no mortgage in principle, and 4% admitted making an offer without any of the three.
Despite this, many buyers still had offers accepted. While 62% said the agent or seller was aware of their financial position, 38% said they were not challenged at all.
Problems often emerged later. Just 11% completed as planned, while 25% saw delays at exchange and 52% experienced pushed-back completion dates.
In 12% of cases, the transaction collapsed entirely.
SELLER PROTECTION
Chris Hodgkinson (main picture, inset), Managing Director of House Buyer Bureau, says: “For sellers, there is nothing more frustrating than accepting an offer, taking the property off the market, and beginning to make plans for your onward move, only to discover weeks later that the buyer was never actually in a position to proceed.
“The industry should be doing far more to protect sellers from this situation and estate agents, mortgage advisers, and solicitors all have a role to play in ensuring that buyers are properly qualified before an offer is accepted and a sale is allowed to progress.
“Unfortunately, that doesn’t always happen and, even when the correct information is provided, many sellers still feel they have little choice but to proceed with a buyer who isn’t ready, because the market has softened significantly over the last year.
“Certainty has become just as important as price.”
“Buyer demand is weaker, homes are taking longer to sell, and transactions are taking longer to complete. As a result, many sellers are understandably reluctant to walk away from an offer, even when there are clear warning signs that the buyer may not have the finances in place.
“The problem is that this can leave sellers facing months of delays, missed onward purchases, additional legal costs, and in the worst cases, a complete fall-through. In the current market, certainty has become just as important as price.”
