HIDDEN COST OF THE PROPERTY CHAIN

[Housing News, Monday, 22 May 2006]: National Homebuyers, a leading consumer facing property purchasing company, has announced the results of research confirming that selling the average house through the traditional chain process could cost as much as 22% of the value of the property, or £44,575.39.

Based on figures from bbc.co.uk, HM Treasury, The Office of National Statistics and Hometrack, National Homebuyers found the costs of selling property through the traditional chain model are much higher than publicly perceived.

The results combine the costs of estate agents fees and solicitors fees added to the 'hidden costs' of selling your property - the 'opportunity cost' of what you could have been doing with your time - as well as other considerations.

Based on property chain sales falling through one in three times (bbc.co.uk), the result has been set out in three outcomes - a direct sale, as well as the chain falling through once and twice.

The average UK property cost £205,674 (Hometrack). With no chain break (66% chance) added cost are £21,243.05 - 10.3% property value. With one chain break where a purchaser withdraws (33% chance) added costs are £32,903.34 - 16.0% property value. If there are wwo chains break (11% chance) costs are £44,575.39 - 21.7% property value.

David Harber, Communications Director for National Homebuyers said; "This research details the true cost of the inefficiency of selling your property in the open market.

“One issue is that when deciding how to sell their house, few people account for the opportunity cost - the monetary value of their own time in that process. National Homebuyers encounter people every day, and help them sell their property, that have not factored the hidden costs as well as the fallibility of the chain.

Effectively, we enable people to break the chain, putting them in a stronger situation to buy their new property."