However, as transactions drag on, these deals expire and buyers have to close new mortgage agreements at much higher rates. Between November and May alone, the average two-year fixed-rate deal for a 25 percent deposit mortgage rose from 1.53 percent to 2.63 percent, according to analyst Pantheon Macroeconomics. This was the fastest increase in six months since 2003 and costs an average buyer an additional £1,980 per year.
Lenders also adjust their affordability criteria and ratings of borrowers’ spending as the cost of living increases. Buyers may suddenly find out that they can no longer get a mortgage for the amount they had previously agreed.
Aaron Strutt, of Trinity Financial mortgage brokers, noticed a borrower whose mortgage offer was reduced by £30,000 after his offer expired, from £350,000 to £320,000.
Simon Brown, of Landmark, warned that more sales could fail if the deals drag on. “Otherwise the price will drop. The buyer will still be there, but maybe they can just buy at a lower price.”
Half of all UK sales in the year so far have lasted more than three months, a record high and about double the share in 2017, according to Hamptons brokers. For mortgaged buyers, the proportion taking more than six months to complete has hit an all-time high of 13.9 percent. One in seven will therefore have to renew their contract before they can move.
The waiting times for purchases increased during the pandemic real estate boom. But they have not improved since the lockdown ended, or even when demand cooled. Instead, they have deteriorated.
In June 2022, the average wait time for a buyer was 130 days, according to Landmark. This was 19 days longer than in June 2021, when the transfer process was under particular pressure due to the end of the stamp holiday that month.
Part of the problem is a chronic shortage of carriers, many of whom have left the industry during the pandemic. “They were dealing with extremely emotional people and frankly many of them were tired of being sworn in,” said Ms Rudolf.
The industry is trying to speed up the buying process by replacing manual functions, but these improvements may soon be overtaken by a real estate crisis. “No one will be able to afford to move and we will see house prices fall, which will startle people. Then it will inevitably take longer to sell properties,” says Ms Rudolf.