Gazumped Britain IV: Uncovering the Challenges Facing Homebuyers

Continuing challenges and generational differences

Our research revealed that around 37% of homebuyers in England and Wales were gazumped while trying to purchase a property in the past decade. This was noticeably higher than the figure recorded in both 2019 and 2022 (31%). Also, slightly more (29% compared to 26% in 2022) admitted to gazumping another buyer to get the property they wanted.

Notably, much of this gazumping hit some generations more than others. This survey showed that only around 20% of those aged 55+ were gazumped by a rival bidder, down from 24% in 2022. But, younger generations appear to be particularly at risk in the current market.

Some 61% of those aged between 18-24 revealed they had been gazumped, far higher than what was seen in 2022 for anyone aged between 18 and 54. This is proving costly for a generation yet to build substantial wealth.

Just over half (57%) paid and lost fees to intermediaries (solicitors, surveyors, etc.) as part of a property purchase that later fell through. This was a higher result seen than in any other age group in 2024.

But, in the current market, it appears a ruthless precedent could be being established among youngsters. While those between 18-24 years of age are the most likely to be gazumped, they’re also the likeliest cohort to do the gazumping.

Half admitted to gazumping a rival buyer – by coming in with a higher bid on a property for which the seller had already accepted another offer. Also, 59% said they had gazundered a seller, lowering their offer late in the process. Again, higher results than any other age group.

Also, while 77% of 18-24-year-olds believe the property market is too competitive, they were the age group with the fewest amount of people who wanted to see the government introduce laws to ban gazumping. Just under 60% want the government to step in, while at least 8 out of 10 of respondents aged 45 or over want the practice outlawed.

It appears many in the Gen Z cohort want to be free to gazump away. It’s worth keeping an eye on the preferences of these young buyers. Millennials and Gen Z are set to inherit £5.5 trillion[14] from their elders over the next decade or so. It’s likely at least some of this capital will be funnelled into the property market.

London no longer dominates the gazumping scene

Gazumping has become more widespread. While the practice is still common in the Greater London area, England’s capital is no longer the capital for gazumping.

Some 53% of buyers in Greater London said they were gazumped by a rival bidder, according to our 2024 survey. This was down from 62% in 2022.

In fact, the West Midlands had the highest proportion of gazumped buyers, fractionally ahead of London. Across most of England and Wales, the prevalence of gazumping rose between 2022 and 2024. Some of the biggest rises occurred in the West Midlands (32% in 2022, 53% in 2024), and the North West (27% to 43%).

Interestingly, despite gazumping being an issue for buyers across England and Wales, fewer want to see the government ban it, as the Scottish government has, when compared to 2022’s results.

Across all regions, 78% of respondents said they wanted banning laws introduced, slightly down from 79% in 2022. Some 70% of Londoners want to see legislative change, but the highest proportions were found in the North West (87%), The South East (82%), Wales (81%), and the East Midlands (82%).

How bridging can help buyers with the costs and repercussions

Regardless of whether the state gets involved or not, buyers need to do what they can to avoid gazumping wherever possible. It’s proving increasingly costly for those caught unawares.

Our results showed nearly 60% of those who had been gazumped in the last decade lost money in the process to legal fees and other purchasing costs. In 2022, it was only 23%.

The costs gazumped buyers face aren’t exclusively financial either. After being gazumped, 62% of respondents said they missed out on buying their dream home, while 61% said they ended up buying a property they liked less.

Fortunately, while gazumping is proving a stubborn issue to overcome, it’s likely becoming increasingly apparent that specialist finance can help. The circumstances in which buyers find themselves gazumped can all be aided by bespoke lending.

According to our 2024 survey:

• 54% of gazumped respondents were gazumped because they got stuck in a long property chain and it took too long to complete the purchase (compared to 25% in 2022)
• 58% were gazumped while waiting to find a seller for a property they owned (compared to 20% in 2022)
• 59% were gazumped, at least in part, because of delays or long waiting times in getting a mortgage (compared to 20% in 2022)

These are all issues that bridging finance and/or specialist BTL mortgages can help with. At MFS, our bridging loans can secure a property where delays or broken chains threaten to dismantle a purchase.

What’s more, our funding can be issued in mere days, allowing investors to jump on opportunities quickly, and avoid being outbid by rivals.

Priorities among investors and buyers

Despite declining slightly since 2022, the majority of our respondents still want to see the government introduce laws to ban gazumping, as the Scottish government has done. But, this preference could conflict with other priorities investors and buyers may have.

Since our 2022 gazumping report, we have produced several other pieces of independent research. Each of which highlighted that property investors and/or homeowners will have varying priorities.

For example, our empty building report[15] revealed that around 61% of respondents agreed that stricter regulations should be brought in to stop people from leaving their homes vacant, or letting them fall into dereliction. Also, 67% believed the government should do more to incentivise people to buy and renovate derelict, empty properties,

Also, our report on the property market’s policy wish-list[16] showed that only 21% of respondents felt the government was doing enough to tackle the housing crisis. In terms of what they’d like to see changed, most showed a preference for some kind of tax reform.

Ultimately, there’s one potential solution that runs through all these concerns. By increasing supply to match demand, we could render gazumping, dereliction, and tax reform moot.

It’s still believed that a minimum of 300,000 new homes[17] per year are needed to keep up with demand. a target the government hasn’t hit since at least the early 2000s[18]. Nevertheless, with a general election looming[19], both of the main political parties have ramped up their housebuilding rhetoric in recent months.

Labour plans to allow 1.5 million new homes[20] to be built should it come to power. Meanwhile, the Conservatives still vow to have a million new homes[21] built by the end of the Parliament.

We will have to wait and see if these targets are met over the coming years. Until then, buyers should keep an eye on gazumpers, and the bespoke financial products that can help them.

The view of our CEO

“Gazumping is still a thorn in the side of the English and Welsh property buyer. It’s revealing that our latest research on the issue shows that not only is gazumping more prevalent, but it’s also increasingly widespread outside of the London and the Southeast hotspots.

“Gazumping is still primarily driven by a lack of supply in the housing market. But it’s clear the economic challenges of the past couple of years have also played their part. On top of struggling with a limited supply of properties, buyers have also had to contend with rising costs, nervous high street banks, and an uncertain economic climate.

“There is little that can be done about these external issues. Homeowners and investors don’t have a vote on how the base rate should move. Nor can they force mainstream mortgage lenders to ease their criteria.

“But, they do have options for manoeuvring around these difficulties. As borrowing delays and property chain breaks emerge, the need for specialist finance will become increasingly apparent.

“Bespoke lenders like MFS are designed to provide fast, flexible solutions for these issues. Even now, our funding can be delivered within 3 days, allowing borrowers to move forward confidently.

“Indeed, our ability to support investors has only improved since our last gazumping report. Since May 2022, MFS has secured multiple funding lines from institutional investors. We’ve also joined several lending panels, expanded our headcount, and launched many new products and promotions.

“The gazumping conundrum shows few signs of slowing down or dissipating. Buyers are still keen for the state to act on this. Fortunately, it looks like the government is finally taking notice.

“Recently, the Levelling Up, Housing and Communities Committee launched an inquiry into improving homebuying and selling in England, which included an examination of the impact of gazumping or gazundering, and how they may be remedied.

“We all await the results of this inquiry with bated breath. Until then though, we’ll continue being there for English and Welsh property investors and landlords.”

– Paresh Raja, CEO, Market Financial Solutions