The latest data and analysis from Market Financial Solutions has revealed the challenges faced by home buyers in the UK’s competitive property market.
According to survey of more than 750 UK homeowners, a worrying 31% of UK homeowners have lost out on a property as a result of being gazumped in the past decade – with 39% having to pay fees to intermediaries despite not completing on a property purchase. Figures from Which? show that on average home buyers lose £2,899 when a house deal falls through.
Nonetheless, 43% said they would still consider gazumping a rival buyer in the future if it meant successfully completing on a property acquisition.
Of those who said they have experienced one or more property purchases fall through in the past decade, 34% said it was due to either themselves or someone in the chain not getting their mortgage approved in time. This number rises to half (49%) for those aged between 18 and 34.
A third (33%) of those surveyed also said they encountered delays when trying to sell a house they owned, forcing them to miss out on their next purchase.
Elsewhere, MFS’ research found that two thirds (66%) of homeowners think the process of buying a property has become more difficult over recent years as a result of increased competition and a lack of housing supply.
The vast majority (80%) of respondents are in favour of the government introducing laws to prevent gazumping in England and Wales, as is currently the case in Scotland. In October, the government said it was considering the introduction of a “reservation agreement” to bind buyers and sellers to a deal, thereby reducing the chances of gazumping or gazundering.
Paresh Raja, CEO of MFS said, “With demand for UK property constantly high, the process of buying a home has become incredibly competitive. As a result, a significant number of UK homebuyers are losing out on deals at the critical closing stages.
“Not only is gazumping a cause for frustration and disappointment, it also can incur significant costs to the prospective buyer. Avoiding complicated chains and having immediate access to finance can reduce the chances of a prospective buyer missing out on a purchase, but it’s clear from MFS’ research that further measures are needed to prevent gazumping in England and Wales. In the aftermath of the general election, let’s hope the elected government looks at measures to stamp out gazumping as a top priority.”