Gazumping is alive and well in much of England and Wales, despite the slowdown in the property market, with new research showing it is worst in Sheffield.
More than a third of buyers in the Yorkshire city have suffered from gazumping, a practice where a seller accepts and offer and then rejects it when a better one comes along. It is usually a sign of an overheated market was a prominent during the last housing bubble.
But according to the research by Phil Spencer’s home movers’ site Move iQ and the PropTech firm Gazeal, one in six buyers in England and Wales encountered gazumping and a third of purchases fell through in the first three weeks.
The analysis, of more than a million property transactions recorded by the Land Registry, found that 35% of would-be buyers in Sheffield were gazumped, more than double the average for England and Wales of 16%.
In the city average property prices rose by 7% in the 12 months to the end of January, and in Manchester they increased by 7.6% over the same period, leading to 25% of buyers experiencing gazumping.
The research suggests that even areas where prices are falling are now seeing high levels of gazumping. The second worst hotspot is Maidstone in Kent where 32% of buyers were gazumped despite the fact that average prices fell by 1% in the year to January.
While gazundering, where buyers demand an eleventh hour discount on a price they previously agreed with the seller, is often assumed to be a greater threat in the current slow market, the research reveals dozens of areas where gazumping is still rife.
They include Cambridge where 28% of buyers have been affected, Birmingham with 26%, Norwich 24%, Nottingham 22%, Cardiff and Leeds both 20%, and Bristol and Outer London both 19%.
‘For anyone who thought gazumping vanished with the runaway price rises of a few years ago, our findings will come as a reality check. Gazumping is alive and well, and still causing heartache for tens of thousands of buyers across England and Wales,’ said Phil Spencer, TV property expert and co-founder of Move iQ.
‘Britain’s fragmented property market is throwing up huge regional extremes. In hotspots where prices are still rising fast, sellers can be tempted to go back on their word to a buyer if they get a better offer elsewhere. Meanwhile, in slow markets, the lack of homes for sale can lead sellers to leave would-be buyers in the lurch if they get a last minute offer from someone else,’ he pointed out.
‘But whatever the market conditions, the real culprit is the legal blind spot in the way homes are bought and sold in England and Wales. A legal system that lets sellers leave buyers high and dry weeks, or even months, after accepting their offer is clearly not fit for purpose,’ he added.
