Nearly three in ten homebuyers who make offers on properties are not in a financial position to proceed with the purchase, according to new research from House Buyer Bureau.
The study found that 29% of buyers making offers lack either a mortgage in principle, sufficient deposit funds, or enough savings to cover stamp duty and transaction costs. In some cases, buyers are missing all three requirements.
Verification gaps in the buying process
The research revealed that 38% of buyers are never asked to prove they have the necessary funds in place when making an offer. Additionally, 55% of buyers do not have a mortgage in principle when they first begin enquiring about properties.
According to the findings, 62% of respondents said that the seller or estate agent was aware they did not yet have the required funds available.
Impact on transaction completion
The data shows that 69% of buyers without all required funds still proceeded with purchases after offers were accepted. Of these transactions, only 11% completed as planned. A quarter experienced delays to exchange of contracts, whilst 52% saw completion dates pushed back. In 12% of cases, transactions collapsed entirely.
These completion challenges mirror broader market trends, as evidenced by recent data showing volatility in property transactions across different market segments.
Chris Hodgkinson, managing director at House Buyer Bureau, said: “For sellers, there is nothing more frustrating than accepting an offer, taking the property off the market, and beginning to make plans for your onward move, only to discover weeks later that the buyer was never actually in a position to proceed.”
He added: “The industry should be doing far more to protect sellers from this situation and estate agents, mortgage advisers, and solicitors all have a role to play in ensuring that buyers are properly qualified before an offer is accepted and a sale is allowed to progress.”
Industry implications
The findings raise questions about due diligence practices within the property sector and the potential impact on transaction timelines. With over half of underprepared buyers experiencing delayed completions, the data suggests that more rigorous financial verification procedures could reduce fall-through rates.
The research comes at a time when efficiency in property transactions remains a focus for the industry, particularly as alternative financing options continue to develop to support faster completions.
