Homebuyers in London are most likely to be ‘gazumped’
Being ‘gazumped’ is the fear of every buyer who thought they were on track to buy their dream home.
But buyers outside the capital can feel relatively safe: the frustrating, but not illegal, practice of a home seller accepting an offer from one person, only to later reject it in favour of a higher offer from another buyer seems to be a London thing.
A shocking 66 per cent of homebuyers in the capital claim they been gazumped in the last year, nearly double the 35 per cent in 2017. Only a fifth or fewer buyers elsewhere in Britain report suffering a gazump.
A shocking 66 per cent of homebuyers in the capital claim they been gazumped in the last year, nearly double the 35 per cent in 2017.
In the North East the proportion is 22 per cent, with the North West and the Midlands ranked in joint third place at 21 per cent.
The study by estate agent eMoov suggested that London is the gazumping capital due to the region’s two-speed market. While the higher end of the market has cooled, there are still pockets where buyer demand and transaction levels are high, with gazumping remaining prevalent.
It means that in the slightly cooler areas of London, a slight reduction in asking prices means savvy buyers are using this reduction gap saving to submit a higher offer last minute to secure a property without going massively over budget.
The study of 1,006 homeowners also found that first-time buyers are most likely to be gazumped with 58 per cent of 25 to 34 year olds saying they had been on the receiving end of the practice.
A total of 34 per cent of men admitted to having been gazumped, while only 16 per cent of women said this had been the case.
However, the number of buyers who have been gazumped across the whole of the country during the past year has fallen, from 36 per cent in 2017 to 25 per cent in 2018.
Buying agent Henry Pryor described the overall decline as ‘welcome’, saying: ‘This is expected and no surprise. As the market cools there are fewer chances of a second buyer popping up unexpectedly and wanting to overturn an agreed deal.’
London has retained its crown as the gazumping capital of Britain in new research
However he added: ‘The cyclical property market which has been cooling for the past couple of years as prices fall back means we’re more likely to see ‘gazundering’ making an unwelcome return like the ghost of Christmas past.
‘This is when buyers drop their offer on the day of exchange of contracts leaving the seller with a stark choice of taking a bird in the hand or walking away on principle.
‘While infuriating and expensive for those it happens to it is actually quite rare and most sales go through without this kind of hitch.
‘With the market expected to remain flat in the coming two or three years I don’t expect to see a rise in this kind of thing – one advantage of a more stable market is increased certainty for all those involved in the house buying and selling process.’
|25 – 34||58%||40%||2%|
|35 – 44||41%||57%||2%|
|18 – 24||35%||53%||12%|
|45 – 54||12%||87%||1%|
Russell Quirk, founder and chief executive of Emoov.co.uk, said: ‘Although market conditions remain tough, the good news at least, is that gazumping has declined as a result.
‘While we are still seeing a steady number of sales each month despite stock levels also remaining low, there isn’t the overwhelming buyer appetite that we’ve seen in previous years.
‘As a result, this reduction in competition is seeing fewer homeowners receive and opt for a last-minute higher offer, at the expense of their existing buyer.’
However, he added: ‘That said, the art of gazumping is still very prevalent across the capital where demand remains strong in numerous locations, despite the wider topline figures showing an overall slowdown.’
It follows separate research that revealed the cost of a property sale breaking down has reached £2,727 spent on pointless legal costs and associated fees for marketing a property.
The study, from campaigning group the HomeOwners Alliances and IMMP, a service that connects buyers and sellers online, found that more than 300,000 property transactions fall through each year.
It means homeowners in England and Wales are spending an eye-watering £818million a year on property sales that don’t materialise.