Gazumping rife in UK property market

Permalink: Gazumping rife in UK property market
by Brian Turner

A study by fool.co.uk has found that gazumping continues to be a significant issue in the UK property market.

Gazumping happens when someone makes an offer on a property that is agreed to, only for someone to come in at the last minute and make the purchase with a higher offer. It works because any agreement between buyer and seller is not recongised in law until a contract has been signed.

It is the period between an offer is made, and a contract is signed, that creates room for gazumping, with the original buyer losing out if they will not make the later offer.

From a survey of 2000 of their readers, fool.co.uk found 12% had been gazumped over the past year.

More startlingly, 22% revealed they would attempt to gazump a sale if they could, and the property were desirable enough, with 11% describing it as a “necessary evil”.

Gazumping is especially a problem for first-time buyers, who are unlikely to have the available capital to match a gazumping bid, especially when more than 10% of the UK property market is now powered by buy-to-let operations with deeper pockets.

According to Alison Hunt at fool.co.uk, there are some basic steps that a buyer can attempt to make, in order to prevent gazumping:

1. Insist the property is removed from the market
2. Sell your property before buying another
3. Exchange contracts as quickly as possible
4. Maintain a good relationship with the seller
5. Work with agents on an exclusive basis

In the meantime, buyers are warned to be aware of the risk of being gazumped, though as house prices stall, and sales volume stalls, property buyers may be increasingly less likely to suffer from being gazumped.

However, the prospect of being gazumped is particular to England and Wales, while Scotland’s different system of property buying makes it rare.