Having someone outbid you on a property you are in the process of purchasing at the last minute can be a frustrating and costly experience.
So it’s no surprise that more than three-quarters of homeowners believe this practice, known as gazumping, should be banned.
A new survey of 1,183 people who bought a property in England and Wales since 2014 revealed that an alarming 38 per cent had been deceived by a rival bidder while trying to buy a property.
Deceptive tactic: A total of 38% of those who have bought a property in England and Wales since 2014 have been deceived by a rival bidder while trying to buy a property.
The survey looked at attitudes around gazumping and was conducted between March 22 and 24 of this year by Market Financial Solutions.
It found that 78 per cent are in favor of the Government introducing laws to ban the practice of gazumping in England and Wales. The practice has already been banned in Scotland.
The survey also revealed the proportion of homeowners who are willing to resort to such questionable tactics to get the property they want.
It found that 29 per cent of homebuyers admitted to having deceived a rival buyer when an offer on a property had already been accepted.
And 46 percent said they would consider making a higher offer on a property where an offer had already been accepted, to get the property they had in mind.
A total of 73 percent of people believe that gazumping (and gazundering, which is when a buyer reduces their offer during the buying process in the hope that the seller will accept it to prevent the sale from falling through) are more common than they used to be. .
More than a quarter of buyers (26 percent) have snubbed a seller by reducing their offer late in the process.
These practices are symptoms of a competitive market and 67 percent of respondents said the housing market is currently too competitive.
“It’s a bit like shoplifting, we’d all like to see the blowback, but the best we can hope for is to minimize it.”
Trevor Abrahmsohn, of estate agency Glentree International, explained: ‘Gazumping is the manifestation of a runaway property market where demand exceeds supply.
‘Gazundering, on the other hand, is the opposite of this and is prevalent in a declining market where supply exceeds demand and buyers go back on their word and offer less, particularly at the last moment, just before the exchange of contracts.
‘Although Scotland has attempted to engineer a much quicker exchange of contracts, it is still subject to funding – and possibly surveys – allowing some room for maneuver on the part of the buyer.
“It’s a bit like shoplifting, we’d all like to see the blowback, but the best we can hope for is to minimize it.”
Enough: around 78% of home buyers are in favor of the Government introducing laws to ban the practice of gazumping in England and Wales.
It comes after the Government’s Levelling Committee launched an inquiry into improving the process of buying and selling homes in England.
The deadline for submissions to the inquiry was last month.
Paresh Raja, of Market Financial Solutions, said: ‘Despite all the challenges that both buyers and sellers have faced in recent years, there is no escaping the fact that the property market remains incredibly competitive.
Not only is gazumping becoming more common, but there is a huge demand for changes in laws to address the problem.
‘Our research highlights one consequence of this: buyers often have to resort to questionable tactics such as gazumping to get the property they want.
‘As the Government’s Levelling Committee launches an inquiry to improve the buying and selling of homes in England, it is important that they pay attention to this data.
‘Not only is gazzumping becoming more common, but there is a huge demand for changes to the laws to address the problem.
‘Clearly, the underlying and persistent imbalance between supply and demand is a key factor in this problem.
“Therefore, it is more important than ever for lenders and brokers to work together to provide the customized financial solutions homebuyers need to meet the challenges of today’s market, and speed remains a vital quality among lenders; This closes the window of opportunity for a buyer to be blown away.
