Gazumping first came to prominence in the late 1980 and early 1990s, with demand outstripping the number of homes for sale.
Gazumping occurs when a buyer has made an offer on a property, which is accepted by the seller, only for the seller to accept a higher offer from someone else.
Call for a change in the law
But with a limited number of homes for sale and high demand, the practice is becoming more common.
It sounds unfair, but is legal in England and Wales, as an offer is not legally binding until a contract has been signed.
Research by lender Market Financial Solutions (MFS) shows:
- 31 per cent of homeowners have been gazumped by a rival bidder while trying to buy a property in the last decade
- 47 per cent said they would consider gazumping a rival bidder if it meant getting the property they wanted
- 26 per cent admit to gazumping another buyer
- 37 per cent of property buyers have lost fees when a purchase fell through
A large majority, 79 per cent, believe the practice should be outlawed as it already has been in Scotland.
The survey included a nationally representative sample of 524 UK adults who had all bought a residential property in England or Wales in the last decade.
It suggests that there are around 29 prospective buyers for every residential property that is sold in the UK which may encourage gazumping.
Homebuyers can lose thousands
One in five said the reason they had been gazumped was down to delays and waiting times in getting a mortgage with 23 per cent of gazumped homebuyers losing money as a result.
Homebuyers lose an average of £2,700 when a purchase falls through and for just over 10 per cent of buyers whose deal collapses, they end up losing more than £5,000.
Paresh Raja, CEO of MFS, said: “The highly competitive nature of the property market does, unfortunately, lend itself to questionable tactics in some quarters. Gazumping is a prime example, and the data clearly shows that this issue is far more prevalent in London than the rest of the country.”
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