Being gazumped is arguably the most infuriating thing that can happen to a purchaser and due to the increasing competition for houses as well as help from government schemes such as the Help to Buy, the Gazump is making a comeback.
Gazumping occurs when a prospective purchaser has an offer accepted on their ideal home and the sale looks all set to go through when another bidder makes a higher offer. This was a common occurrence during the booms of the Nineties and Noughties but diminished due to the financial crisis.
However, the market is on the rise and with the help of the successful help to buy scheme, which guarantees mortgages for first time and new build buyers up to £600,000, the demand for houses has increased and the number of people able to bid on one property has increased. In turn this has increased the probability of one purchaser being gazumped.
A major factor of gazumping in the capital is the influx of foreign money, with overseas buyers prepared to pay a premium and act quickly to secure a property.
Simon Deen of Ashton Chase explains:
“Two weeks ago we had an apartment in Portland Place that was under offer to a local British buyer…they were gazumped by a Chinese buyer, who exchanged contracts within 72 hours of seeing the apartment.â€
However, gazumping is not restricted to Central London and has also spread to parts of the countryside according to Edward Heaton of Heaton and Partners.
“I have seen a marked increase in gazumping this year at the top end of the country house marketâ€
It seems that the only way to avoid being gazumped is by looking to purchase a property in the North or in Scotland where the housing market is yet to bounce back in the same way as in London or the South. On current trends though, the rest of the country could soon be back to levels of gazumping not seen since 2007.
One client of a local member with propertysurveying.co.uk told us,
“We put our house up for sale last week and within 20 minutes we had an offer. Last weekend, 19 more offers came through.â€
On a more typical scale outside London another client of propertysurveying.co.uk has had to assist with a property purchase this last week where the asking price of a property was £485,000. The prospective purchaser, in order to secure the sale and due to competition in the Brighton area needed to agree a sale at £495,000.
Gazumping is certainly an inconvenient annoyance, but perhaps, if it is indicative of a market once again on the rise, we can bear it.
BT/SRJ