Prospective homebuyers backing out at last minute

Permalink: Prospective homebuyers backing out at last minute
by Kay Murchie

Estate agents have claimed that over 30% of homebuyers are etting cold feet and are pulling out of deals at the last minute among concerns of a property market crash.

Estate agents and mortgage brokers are warning that buyers are becoming nervous about house price falls and chains are collapsing through buyers’ panic.

The global credit squeeze has meant that lenders are becoming more wary of who they will lend to so it is becoming increasingly difficult for those trying to get a mortgage and get onto the property ladder.

A survey for the moneysupermarket.com website established that barely 50% of mortgage applications were being approved in October, compared with 67% a year ago.

Jeremy Leaf of the Royal Institute of Chartered Surveyors (Rics) said 6-12 months ago, approximately 80% of deals went through, but that figure has fallen to 60%. People have become concerned about price levels and are afraid that if they go ahead today, the property will be worth less in a few months’ time.

Furthermore, John Charcol, the mortgage brokers, has seen an increase of 50% in the number of buyers pulling out at the eleventh-hour.

Many people are becoming increasingly concerned about taking on large amounts of debt in case they end up suffering negative equity – owing more than their houses are worth.

A recent survey by the Halifax bank established the property market was slowing down with a 1.1% fall since September.