The Bank of England’s (BoE) Agents’ Summary of Business Conditions report found that up to 40% of house sales are failing.

The report found that housing market activity was more depressed than in the early 1990s with some estate agents reporting that four in ten house sales were failing to complete. The BoE believe that the main reasons for this are that many buyers are having their mortgage offers withdrawn before they can complete or are pulling out of transactions due to the fear of a continuing fall in house prices. With buyers pulling out of house purchases the effects are being felt further down the housing chain. Those who are unable to sell their house are finding that they cannot complete on the property that they wish to buy.

With the increasing number of transactions falling through estate agents reported that they are being more selective with new instructions from sellers. Sellers are now being asked about their willingness to reduce the price of their property before estate agents accept new instructions to sell.

Ray Boulger, senior technical manager for Charcol Mortgages, told PIN: “Housing transactions are much lower than this time last year, I would say that they are falling off at a greater rate than in the early 1990s. Chains are a huge problem at the moment, they are taking much longer to complete which is increasing the chance of funding falling through. Over recent weeks we have seen some lenders lowering their mortgage rates, currently things are not getting any worse although it will be some time before we see any real improvement.”