Research reveals extent of gazumping in UK property market
Buyers in London are the most ruthless in the UK with new research showing they are three time more likely to indulge in gazumping than the national average.
Gazumping, where a buyers puts in a last minute bid for a property once the seller has already accepted another one, is often a feature of a booming property market but now it is lack of supply that is behind the behaviour.
According to new research some 15% of adults in London have lost out on a property purchase to a rival buyer despite having an offer accepted, three times the UK figure of 5%.
Overall the research from Bridging lender Market Financial Solutions some 1.54 million, of which 400,000 were in London, said they have lost out on their dream home after a property deal fell through at the last minute.
The survey also found that 8% of adults in London said that they have lost money on fees to intermediaries such as solicitors and surveyors because they were pipped to the post during a property purchase.
More than a million admitted to gazumping other property buyers by bidding on properties soon to change hands, while the same number said they would do so in 2017.
Millennials were found to be more at risk than older generations when it comes to being pipped in the property market. Of those aged between 18 and 34, some 1.18 million said they had lost out to rival buyers after having an offer accepted, 1.03 million had seen a deal fall through because they could not access funds in time and 738,000 had lost money on intermediaries’ fees after being gazumped.
However, to effectively compete a growing number of millennials are willing to gazump as part of their property strategy and 442,800 18 to 34 year olds admitted to gazumping in 2016, while 590,400 are considering doing so in 2017.
The highly competitive nature of the property market is leading to a degree of reticence among some buyers, the research suggests. Over a million adults said that deals falling through at the last minute has dissuaded them from trying to buy a different property. Londoners and millennials were twice as likely as the national average to hold this opinion.
‘Not only are people losing out on the fees they pay to solicitors and surveyors, but many buyers are also losing out on their dream home. Our research reveals that failure to access funds in a timely manner is one of the most common reasons for property purchases falling through,’ said Paresh Raja, MFS chief executive officer.