With a government inquiry into home buying and selling being launched, this thorny debate has already caused some heat amongst homebuyers, with many backing a ban but admitting to gazumping in the past.
Gazumping is the name given to the practice where a seller accepts an offer on their home but then rejects this later when a higher offer is put in by another buyer.
Although it is legal in England and Wales, it’s considered unethical by many buyers with 77% of respondents to a survey by Market Financial Solutions (MFS) saying it should be banned.
Yet whilst three quarters want the government to outlaw the process, 46% admitted they would still consider gazumping a rival buyer in the future.
The specialist lender commissioned the independent survey of 1,183 people who have bought a property in England and Wales since 2014.
It found that 37% were gazumped by a rival bidder while trying to buy a property in the last decade – an increase of 7% since MFS last ran this survey in 2022.
Almost one in three (29%) homebuyers admitted to gazumping a rival buyer and half (46%) would consider doing so in the future if it meant getting the property they wanted.
MFS’s research also found that three quarters (73%) of people believe gazumping and gazundering – where the buyer lowers their offer just before exchange of contracts – have become more commonplace in recent years. This could be due to high demand and limited supply.
In addition, the survey revealed that 26% of homebuyers have gazundered a seller by lowering their offer late in the process.
Paresh Raja, CEO of MFS, said: “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, it’s important they take heed of this data. Not only is gazumping becoming more prevalent, but there is huge demand for laws to be changed to tackle the issue.
“Clearly, the underlying, persistent imbalance between supply and demand is a key factor in this problem. It’s more important than ever, therefore, that lenders and brokers work together to provide the tailored financial solutions that homebuyers need to navigate the challenges of today’s market, with speed remaining a vital quality among lenders – this closes the window of opportunity for a buyer to be gazumped.”
