Buyers favour gazumping ban

Four fifths of UK homebuyers are in favour of banning gazumping in England and Wales, research by Market Financial Solutions (MFS) has found.

Some 79% are in favour of the government introducing laws to ban gazumping in England and Wales, as people think the practice has become more common in recent years due to high demand and limited supply.

A third (31%) of buyers were gazumped at least once while trying to buy their property, with the figure rising to 52% among those who bought in London.

Paresh Raja, chief executive of MFS, said: “With demand for UK property constantly high, buying a home has become very competitive. Consequently, despite wanting to ban gazumping altogether, many buyers clearly fear that they will lose out on their desired property at critical closing stages if they don’t partake in gazumping tactics.

“Aside from the obvious financial costs of being gazumped, missing out on a property can be the source of a great deal of frustration and emotional damage. MFS’s research shows that long property chains and time-consuming mortgage applications often leave homebuyers open to gazumping. So, preparation is key – sourcing the right lender and product ahead of time, and working with service providers who can act quickly, could prove crucial in ensuring a deal is completed with no complications.

“More generally, it will be intriguing to see if the government does indeed bring about any legislation or reform to crack down on the practice of gazumping, which evidently remains prevalent in the English and Welsh property market.”

Gazumping is rarer in Scotland because Law Society of Scotland rules dictate that, where a solicitor has accepted an offer on behalf of their client, they cannot accept another offer from a different party.

That means sellers would have to switch solicitors to engage in the practice.

Despite their distaste for gazumping, 47% of buyers admitted they would consider outbidding a rival in the future if it meant getting the property they wanted.

A quarter (25%) of homebuyers were gazumped because they were stuck in a long property chain and took too long to complete the purchase. Another 20% saw it happen due to delays and long waiting times in getting a mortgage.

Almost a quarter (23%) said that they lost money in intermediary fees as a result of being gazumped, costing a typical £2,700.

Comments 3

  1. And sellers prefer people who agree to buy do not pull out of a transaction!! You need to change the Estate Agent Act before you can stop overbidding!

  2. How absurd! A waste of time and energy trying to “ban” gazumping rather than seek to bring the British property transfer system up to speed and a little closer to the rest of the world. It is shocking that buyer and seller “shake hands” and agree a deal but will not be bound to that deal for 2, 3 or 4 months and in all that time either party can, and frequently do, misbehave by seeking to change the price, withdraw from the deal altogether etc etc without risk of any penalty at all. Parts of Australia use a wonderful system where buyer and seller sign a standard contract at the point a deal is agreed, this can include ‘subject to survey’ but the buyer has just 14 days to satisfy himself as to the condition of the property then either proceed or withdraw at that point, similarly 14 days to sort finance and after 14 days the two are bound to the deal or if finance not forthcoming then the buyer can leave the deal without penalty but either way, very little time wasted. The deal is usually concluded in circa 4 weeks. A system that binds buyer and seller together legally, very quickly and more so as time passes would surely be a handsome improvement on our antiquated and shockingly slow system.

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