The impact of gazumping
Throughout 2019, Market Financial Solutions (MFS) has been speaking with brokers and professional clients across the UK about the challenges they face when looking to quickly complete on a property transaction. Indeed, the specialist finance market, and in particular the bridging loan sector, has become a popular loan option for those seeking to close on existing transactions without undue delay.
There are plenty of reasons that explain why bridging loans have risen in popularity in the last decade. The flexibility and speed with which they can be deployed has certain advantages, particularly when we consider the competitiveness of the UK property market. Domestic and international demand for bricks and mortar investment remains strong, and with a shortage in available housing, more buyers find themselves at risk of missing out on a property opportunity if they cannot access funds promptly.
When the house-buying process becomes drawn out, one of the practices we often see is gazumping – whereby a buyer loses out on sale due to another bidder placing a higher offer on the same property just before contracts are exchanged. This has become a significant issue here in England and Wales; but just how many homebuyers have experienced being gazumped and what have been the implications?
To find out, we have surveyed over 750 people who have bought a residential property in the UK over the last decade to uncover how many have been gazumped, the reasons why it occurred and the effect it had on them. The research has been causing a stir in the press, with The Sunday Times covering the findings alongside a host of prominent property titles.
Overall, our report demonstrates that gazumping remains a prominent issue that needs to be tackled head on. Importantly, our report also shows the importance of having access to fast capital to ensure property transactions can be quickly completed, in turn reducing the chances of a buyer being undercut at the last call.
Click here to download your copy of Gazumped Britain II: Uncovering the challenges facing UK homebuyers.