Proportion of house sales falling through increases as stamp duty deadline looms

The proportion of house sales falling through increased in January as a stamp duty holiday deadline approaches.

Rightmove said the percentage of sales agreed across Britain in January which fell through was at nearly three in 10 (29%), up from 22% in January 2019.

The percentage of house sales collapsing has been edging up in recent months, previously standing at 28% in December and 27% in November 2020.

The stamp duty holiday introduced last July ends on March 31 and there have been concerns the “cliff edge” could prompt an increase in buyers pulling out of sales as they realise they will miss the deadline to complete their purchase.

However, there are also strong indicators that many buyers are keen to press ahead, even if they will miss the deadline.

Rightmove said this year was its busiest month of January on record.

The number of sales in January was up by 5% year-on-year, despite many buyers now being unlikely to meet the stamp duty deadline as the situation currently stands.

Visits to the site were up by 39% compared with January 2020.

The number of prospective buyers contacting estate agents was also up by 7% compared with a year earlier.

The supply of available properties is shrinking. New property listings for sale were down by 21% compared with January 2020 – and Rightmove suggested home schooling may be delaying some people preparing their home to sell.

Demand for homes is also strong among rental sector tenants, with 14% more renters looking for property, and new listings down by 14%.

Rightmove’s director of property data Tim Bannister said: “It’s clear that more people than ever before used the new year as a chance to start thinking about moving home, despite all of the challenges and worries that came with January, but we are seeing the effect of lockdown on the number of properties coming to market.

“I know first-hand how hard it is right now to juggle your work commitments with also trying to teach your kids their times tables, so those looking to trade up to a bigger home may find there isn’t as much choice as before in this sector of the market until kids start going back to school.

“We’re starting to see fall-throughs creep up a bit, though not by a substantial amount, a sign that some deals may be falling apart as they know they won’t complete in time to make the stamp duty holiday deadline, though this is likely to be in the groups set to make more substantial savings.”

He said the start of February so far looks encouraging for activity, pointing to some positive signs for the next few months and into the second quarter of the year.