Withdrawn properties overtake those sold in recent months
More people are having their properties withdrawn from the market than are selling for the first time in two years, a new report has found.
Specifically examining data on properties ‘withdrawn from sale’, the research found that during the second quarter of this year, 51 per cent of properties were removed from the market, compared with 49 per cent of residences which were sold, making it the first time that more properties have been withdrawn than sold since May 2016.
The joint report, from real estate software platform Reapit and property market intelligence consultancy Dataloft, estimates that this corresponds to around £4 billion in potential lost fee income for estate agents.
Looking at the figures as a whole, the findings show that 45 per cent of properties were removed from sale, despite 38 per cent of them actually receiving offers. And generally, withdrawals peak in July and November, although political events in 2017 affected the pattern.
Regionally, London had the highest withdrawal ratio by a significant margin, with almost two thirds (61 per cent) of properties being taken off the market. Higher priced homes (above £500,000) were far more likely to be withdrawn, and London’s prime boroughs of Kensington & Chelsea and also Westminster came out with very high ratios.
The report suggests that Scotland’s relatively low withdrawal ratio of 17 per cent reflects the variances in the home-buying system, with the different market and legal processes playing a key part in making sure fewer sales fall through. Buyers in Scotland are required to have a mortgage agreed in principle upfront, initial searches completed beforehand and solicitors are involved in the process of registering offers. And the parties show more commitment because they have already incurred costs and would lose out due to the up-front fees business model.
Gary Barker, CEO of Reapit said:
“Our research shines the light on the difficulties challenging our estate agents during a perfect storm of lower stock, reduced demand, falling prices and high incidents of withdrawal. For many years we have seen big differences between the volume of properties for sale on Rightmove and the number of sales recorded by the Land Registry, and our research highlights the widespread financial and reputational impact withdrawn stock has across our industry.”
Kindly shared by NAEA Propertymark