- More than a third of buyers in Sheffield are gazumped out of the home they set their heart on
- The Full Monty city’s booming property market is forcing up prices by 7% a year but intense competition stops 35% of buyers from going all the way
- National gazumping map reveals one in six buyers in England and Wales suffers from gazumping, and a third of purchases fall through in the first three weeks
- Move iQ property guru Phil Spencer urges buyers and sellers to use PropTech to protect themselves from the property market’s “legal blindspot”
London, 21st June 2019 – Gazumping is alive and well in much of the country, despite the slowdown in the property market, according to new research by Phil Spencer’s home movers’ site Move iQ and the PropTech firm Gazeal.
The analysis, of more than a million property transactions recorded by the Land Registry, found the worst area for gazumping is Sheffield. Over a third (35%) of would-be buyers in the South Yorkshire city are gazumped, more than double the average for England and Wales (16%).
Gazumping – where a seller who has agreed a price with a buyer goes back on the deal after receiving a higher offer from someone else – is typically seen as a symptom of an overheating property market, where intense competition among buyers leads to bidding wars and the temptation for sellers to leave would-be buyers in the lurch.
That’s certainly the case in Sheffield, setting of the hit film The Full Monty, where average property prices rose by 7% in the 12 months to the end of January, and in Manchester, where a quarter (25%) of buyers suffered the heartbreak of gazumping as prices rose by a brisk 7.6% over the same period.
However the chronic shortage of homes for sale has rewritten the rulebook, and even areas where prices are falling are now seeing high levels of gazumping. The second worst hotspot is Maidstone in Kent, where nearly a third (32%) of buyers were gazumped – despite the fact that average prices fell by 1% in the year to January.
While gazundering – in which 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.
Table: Englandand Wales’ gazumping hotspots
|Rank||City / town||% of buyers suffering gazumping||Average price change, year to January 2019||Average property price|
|12||Brighton and Hove||18%||4.5%||£371,819|
Phil Spencer,TV property expert and co-founder of Move iQ, commented:
“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.
“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.
“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.
“That’s why Move iQ has teamed up with Gazeal, a PropTech company that enables sellers and buyers to agree a deal that has legal force right from the start; sparing them weeks of uncertainty and preventing the frustration and expense of both gazumping and gazundering.”
Offers made – and accepted – on a property for sale in England and Wales are not legally binding until contracts are exchanged. Drafting and exchanging contracts is a legal process that traditionally takes many weeks. A national survey conducted by Gazeal found the average time from an offer being accepted to contracts being exchanged is more than three months (102 days).
The research also found that more than a third (35%) of property transactions fall through within the first three weeks. With UK estate agents collectively reporting that more than 800 transactions fall through a day, official figures from the Treasury estimate that between them, buyers and sellers lose £270m a year on failed property transactions.
Gazeal slashes the time between an offer being accepted on a property and the exchange of contracts. Under its unique fast track process, the necessary legal documents, including searches, are drafted as soon as the property is listed.
Buyers can see these documents upfront – before they offer on the property – so there are no surprises. As soon as a buyer’s offer is accepted, the entire legal pack is sent to their solicitor within minutes, slashing the time taken to get the legal ball rolling.
Buyers and sellers also have the option to lock in their deal with a Gazeal reservation agreement, a legally binding arrangement that means neither side can move the goalposts, making both gazumping and gazundering impossible and providing peace of mind all round.
Duncan Samuel, managing director of Gazeal, commented: “Gazeal has a clear goal – to bring greater clarity, certainty and speed to the legal part of buying a home.
“Above all, we’ve taken the nonsense out of the exchange process. All the checks and documents are processed upfront, which speeds up the process. Both seller and buyer can choose to be legally bound to the deal, so no one can walk away. No time wasters, no stress, no surprises.
“Forward-thinking estate agents around the country arenow offering the Gazeal process to their customers, and we’re delighted to haveteamed up with Move iQ to spread the message to buyers and sellers. The hardestpart of buying or selling a home in England and Wales is the weeks ofuncertainty. With its clear, transparent and legally robust process, Gazealsolves that uncertainty, bringing speed and peace of mind to both buyers andsellers.”
Notes to Editor
For more information, please contact Jack Izzard of Rhizome Media on 07791 106822 or firstname.lastname@example.org
The analysis was conducted on behalf of Move iQ and Gazeal by the data analytics firm TwentyCi. Researchers assessed 1.08 million properties listed for sale between January 2016 and October 2018, comparing offers accepted with the final price paid, as recorded by the Land Registry. A total of 170,523 (16%) were sold after a buyer was gazumped.
Average property price data is taken from the Land Registry.
About Move iQ
Move iQ is the essential guide to navigating the moving minefield, whether you’re looking to buy or rent. Founded in 2017 by Britain’s best-known property expert Phil Spencer, Move iQ brings together everything you need to ensure your next home is right for you.
Move iQ puts power into the hands of the mover; offering a wealth of impartial advice and guidance on everything from finding the perfect property to driving the best bargain.
Move iQ also offers detailed intelligence to prospective buyers. With unparalleled access to dozens of data sources, it produces bespoke property reports on individual homes that pull together all the key things a buyer needs to know before making an offer, from valuation comparables and planning history to a breakdown of school catchment areas, local amenities and crime rates.
Above all Move iQ’s goal is to be the mover’s champion, giving buyers and renters the help, support and voice they need to level the playing field in a property industry that is too often tilted in favour of sellers and landlords.
Gazeal provides a service that gives buyers upfront information on all aspects of a property before they put in an Offer and can legally bind both buyer and seller with the Gazeal Reservation Agreement when the Offer is accepted, entirely removing the threat of both gazumping, gazundering and agreed property deals falling through.