As house prices in the UK continue to soar, a new study has revealed that four in five homebuyers support a ban on gazumping, a controversial tactic that has already been outlawed in Scotland. The research, conducted by specialist lender Market Financial Solutions (MFS), found that 78% of respondents are in favour of the government introducing laws to ban the practice in England and Wales.
Gazumping, which occurs when a rival buyer emerges at the last minute to hijack a purchase with a higher offer, has affected a significant number of potential homeowners. The MFS study found that 38% of homebuyers have been gazumped in the past decade, highlighting the prevalence of this issue in the current housing market.
Despite the widespread support for a ban on gazumping, the study also revealed that many people are not above using the tactic themselves. Nearly one in three (29%) admitted to gazumping a rival buyer by submitting a higher bid on a property, while almost half (46%) would consider doing so in the future to secure their desired home.
Furthermore, the survey found that one in four (26%) homebuyers have engaged in gazundering, which involves lowering their offer late in the process.
According to the MFS research, the competitive nature of the property market is a significant contributing factor to the prevalence of gazumping and gazundering. Three-quarters (73%) of respondents believe these tactics have become more common due to high demand and limited supply, while 67% state that the property market is too competitive.
Paresh Raja, Chief Executive of MFS, commented on the findings: “For all the challenges that both buyers and sellers have faced in recent years, there’s no escaping the fact that the property market remains incredibly competitive. Our research underlines one of the by-products of this, with buyers often having to resort to questionable tactics like gazumping to secure the property they want.”
As the government’s Levelling Up Committee launches an inquiry into improving homebuying and selling in England, Raja emphasizes the importance of addressing this issue. “Not only is gazumping becoming more prevalent, but there is huge demand for laws to be changed to tackle the issue,” he said.
Raja also highlighted the need for lenders and brokers to work together to provide tailored financial solutions for homebuyers navigating the challenges of today’s market, with speed being a crucial factor in preventing gazumping.
With house prices approaching an all-time high and the persistent imbalance between supply and demand fueling the use of controversial tactics like gazumping, the calls for a ban on this practice in England and Wales are growing louder than ever.
