England’s economy is potentially missing out on more than £900m due to property sales falling through, according to an analysis by Rightmove (RMV.L).
The property platform said in findings, published on Friday, that this figure was based on 6% of transactions falling through and not coming back onto the market within a year.
Rightmove’s (RMV.L) analysis used last year’s figure of 1.03 million housing transactions in England, an average stamp duty payment of £7,590 and an assumed average estate agency commission of 1.5%.
The analysis suggested that a total of nearly £392m in potential estate agency revenue commission in England is lost through property transactions falling through, along with close to £515m in potential stamp duty receipts for the government.
Separate calculations showed that there is an “economic opportunity” worth nearly £7m for Scotland and £23m for Wales if the number of failed property sales were reduced. These calculations accounted for the lower rate of fall throughs in Scotland, as well as differing land taxes in the two countries.
Johan Svanstrom, CEO of Rightmove, (RMV.L) said that the property platform’s analysis “highlights the scale of the economic opportunity if fall through rates can be reduced”.
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He said that more than a fifth (23%) of property transactions are affected by sales falling through, “costing agents either lost or delayed fees and leading to some home-movers paying thousands in repeat costs”.
“We believe that further digitisation can help to bring this number down,” Svanstrom added.
The UK government opened a consultation in October to seek views on proposals to improve the country’s home buying and selling process, which closed at the end of the year.
In its response to the consultation, Rightmove (RMV.L) said that providing comprehensive upfront information about a property listing in a consistent way could help to reduce fall-throughs, improve transparency, and support estate agents who have to hold chains together for elongated periods.
The property platform highlighted that it took an average of five months in total for a house purchase to go through the legal completion process last year.
“The home‑moving journey is still slowed down by many manual and fragmented processes,” said Svanstrom. “A seller shouldn’t need to list their home in April to move before Christmas.”
Separate research from Santander (BNC.L), published in September, showed that failed house sales were costing the UK economy at least £1.5bn a year.
