Housing deals falling through as lenders withdraw from market

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by Kay Murchie

A third of housing deals are collapsing because buyers are unable to secure a mortgage as lenders withdraw from the market.

According to property website, Rightmove, the lending squeeze and falling house prices has resulted in a fall in transactions of between 30 and 35%.

Research from Moneyfacts.co.uk has discovered that the number of mortgages on offer has fallen sharply this week. By Friday, 22% of deals available a week earlier had been withdrawn.

Last Friday, HBOS increased its minimum deposit to 5% from 3% and said it would penalise those borrowers putting up less than a 25% deposit on the property.

As a result, the number of estate agency office closures has more than doubled to about 10%, according to Rightmove.

According to estate agents, deals are becoming difficult to secure. Marc Goldberg of Hamptons International said the fall-through rate has gone up significantly in the last few weeks to around 35 per cent. Normally the figure would be between 10 and 20%.

Paul Jarman of Savills estate agents estimated that 20-25% of its sales were falling through, primarily because funding was being withdrawn. Valuers for banks were finding that some houses were worth 10 or 15% less than the agreed price, said Mr Jarman.

David Livesey, chief executive of Connells, which operates 500 branches, said people regularly agree to buy without finances lined up.

There are now only 4,270 different mortgage deals in the market, compared with 15,599 last July.

Last month, Your Move, the country’s third-largest estate agency, announced it was closing 10 of its franchised branches.

Furthermore, estate agency Humberts, recently announced annual losses of £17 million.