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Third of house purchases secured by ‘gazumping’ another buyer’s offer

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The most common reason for house sales falling through during the past year is gazumping, new research reveals.

Gazumping involves the seller backing out of an agreed sale due to a higher offer from elsewhere, and either taking it or asking for more money from the original buyers.

Price comparison website Compare The Market found that 39 per cent of buyers admitted that they had successfully secured their home this way and outbid another offer that had already been accepted.

Comparethemarket found that 39 per cent of buyers admitted that they had successfully secured their home via the gazumping route

Comparethemarket found that 39 per cent of buyers admitted that they had successfully secured their home via the gazumping route

Separately, the research found that among those who tried to buy in the past year but had their purchase fall through, gazumping was to blame for 38 per cent of failed transactions.

Given that the property is so red hot at the moment, it is perhaps unsurprising that homebuyers are willing to pay over the odds. Figures yesterday from Nationwide Building Society showed house prices up 13.4 per cent over the past year.

Indeed, the research found that three-quarters of potential homebuyers would consider gazumping if their dream home was already under offer with another buyer.

The research said that the prospect of being gazumped is adding to stress levels for many homebuyers.

A total of 81 per cent of those waiting for their house purchase to complete expressed concern that another potential buyer might come in and gazump them.

Another reason for transactions falling through is the failure to meet the stamp duty deadline on June 30, which has accounted for 18 per cent of sales falling through, according to the research.

Failing to meet the deadline for the stamp duty holiday leaves some buyers with a larger tax bill that can make the purchase of a house unaffordable. 

This week marks the end of the stamp duty holiday, which sees no tax on the first £500,000 of a property purchase price replaced by none on the first £250,000 until the end of September. Stamp duty is due to return in full after that.

In addition, the survey found that 15 per cent had a transaction fall through due to a member of the household being furloughed, leaving them ineligible for a mortgage. 

The prospect of being gazumped can add to the levels of stress associated with purchasing a property

The prospect of being gazumped can add to the levels of stress associated with purchasing a property

During the past year, 38 per cent of homebuyers paid above the asking price of a property to secure the deal, paying £16,000 on average.

Gazumping is currently legal in Britain, as the ‘agreement of purchase’ only becomes legally binding once contracts have been exchanged.

If a buyer is gazumped after their initial offer had already been accepted, they may also lose out on fees already paid on surveys, solicitors and obtaining a mortgage for the property.

This has created concern in the market and the research found that 68 per cent of people who have bought or tried to buy a house in the past year would support a law that made gazumping illegal, or better protections are in place to prevent this happening

Mark Gordon, of Compare The Market, said: ‘The race to meet the first stamp duty deadline on June 30 has led to an increase in demand for homes, meaning many buyers are willing to pay above the odds and even gazump homes which are already under offer.

‘This has left many prospective buyers significantly out of pocket and adds additional stress to the homebuying process, given the average sale takes about three months to formally exchange contracts.

‘Whether you are a first-time buyer or moving home, prospective homebuyers should be as prepared as possible before making an offer to ensure that the process runs smoothly and quickly. It’s important to make sure you shop around online to compare mortgage rates and have all your finances lined up before putting in an offer.’

The research was based on 2,002 respondents who have bought or tried to buy a house in the past year to May 2021 or who are looking to buy.

How to avoid being gazumped 

While there are no sure-fire ways to avoid being gazumped, buyers can reduce the chances of it happening by taking some simple precautions.

  • Get organised: The sooner an offer is made, the less chance there is of another buyer putting in a higher bid.
  •  Make sure your finances are in place and that you’ve got a mortgage ‘agreement in principle.’
  • Request that the property is taken off the market as part of the offer that is made on the property.
  • Consider a ‘lock-out agreement’ or ‘exclusivity agreement.’ This is where the vendor agrees not to seek, or accept, other offers from other buyers for a certain period. 

And if you do lose out on a purchase, you may be able to recoup some of the costs…

  • Buyers can protect themselves by taking out ‘home buyers protection’ insurance. Policies cover some of the loss of legal, valuation and mortgage administration fees.

North London estate agent Jeremy Leaf said: ‘Gazumping is frequently raised as an issue when buyers are unable to purchase a property. However, we find that in most cases the fault lies with the buyers themselves for failing to exchange contracts within an agreed timescale perhaps or because they were unable to obtain mortgage finance or to arrange a survey in time.

‘Of course, under the present arrangements there is very little to be done in terms of reimbursing those who are genuine victims of the practice. But the advantage of our present system is its flexibility, so that if buyers are unable to meet their obligations, it is relatively easy for alternatives to be found.

‘Other countries do operate different systems whereby offers can be ring fenced for a specific period but that often leads to buyers and sellers playing for time until that period has elapsed or it makes the whole process longer than it needs to be.There are advantages and disadvantages of both systems – neither is perfect.’

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Homes near Elizabeth Line see asking prices double in a decade

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Asking prices for properties for sale near stations on London‘s new Elizabeth Line have more than doubled in a decade, new research has revealed.

Many areas near stations on the capital’s new high-speed line were previously less well connected to key commuter hubs, such as Liverpool Street or Paddington stations.

But they have seen a surge in property asking prices amid new interest from homebuyers and tenants due to the better transport links that the Elizabeth Line provides.

REVEALED: The asking price hotspots around the new Elizabeth Line stations

REVEALED: The asking price hotspots around the new Elizabeth Line stations

Elizabeth Line hotspots: This two-bed flat in London's Windmill lane is o.2 miles from Maryland station and is for sale for £395,000 via Filtons estate agents

Elizabeth Line hotspots: This two-bed flat in London’s Windmill lane is o.2 miles from Maryland station and is for sale for £395,000 via Filtons estate agents

The new figures from Rightmove revealed the extent to which asking prices have risen in local areas around Maryland, Abbey Wood and Stratford stations.

Maryland Station in Newham, which provides an additional option for those commuting near well-connected Stratford, has seen the biggest jump in asking prices.

They have more than doubled compared to ten years ago, rising 108 per cent from £233,480 to £486,235.

This compares to the London average increase over the past ten years of 55 per cent.

About half a mile from Abbey Wood station is this two-bed flat for sale for £235,000 via Your Move estate agents

About half a mile from Abbey Wood station is this two-bed flat for sale for £235,000 via Your Move estate agents

Rightmove has identified the asking price hotspots around the new Elizabeth Line stations

Rightmove has identified the asking price hotspots around the new Elizabeth Line stations

Meanwhile, Rightmove revealed that total buyer demand has risen the most in western areas, while prices and competition has risen most in eastern areas.

Twyford, at the end of the western section of the line and the next stop along from Reading, has seen the biggest jump in the number of buyers contracting estate agents.

Numbers have more than tripled compared to 10 years ago, up 245 per cent.

Those looking to buy near Abbey Wood station, at the end of the South East section of the line, face the stiffest competition from other buyers.

Competition in that area has soared more than nine times and is up 869 per cent.

Rightmove has identified buyer demand hotspots around the new Elizabeth Line stations

Rightmove has identified buyer demand hotspots around the new Elizabeth Line stations

The increase in buyer competition compared to ten years ago around the new Elizabeth Line has been revealed

The increase in buyer competition compared to ten years ago around the new Elizabeth Line has been revealed

Near Custom House station: This two-bed house is for rent for £1,700 a month via Outlook lettings agents

Near Custom House station: This two-bed house is for rent for £1,700 a month via Outlook lettings agents

The rental hotspots along the new Elizabeth Line station have been revealed

The rental hotspots along the new Elizabeth Line station have been revealed

It is a similar story along the Elizabeth line for tenants as many look to balance their commute into London with where they can afford to rent.

Average rents in London have reached a new record of £2,195 a month, up 14 per cent compared to this time last year.

Southall has seen the biggest increase in the number of tenants contacting letting agents compared to ten years ago, more than quadrupling, up 372 per cent.

However, asking rents near Southall station are lower than nearby Hanwell or Ealing.

Asking rents have increased the most in western stations Slough, up 44 per cent, and Burnham, up 43 per cent, while those looking to rent near Custom House station face the most competition from other tenants.

Slough is among the asking rent hotspots along the new Elizabeth Line stations, with the average asking rent up 44 per cent during the past ten years

Slough is among the asking rent hotspots along the new Elizabeth Line stations, with the average asking rent up 44 per cent during the past ten years

One of the new stations built for the Elizabeth Line - Custom House - has seen competition increase 3270 per cent compared to ten years ago

One of the new stations built for the Elizabeth Line – Custom House – has seen competition increase 3270 per cent compared to ten years ago

Custom House, one of the new stations built for the Elizabeth Line and benefitting from significantly lower travel times into Central London, has seen competition increase by a staggering 33 times, up 3270 per cent compared to ten years ago.

Tim Bannister, of Rightmove, said: ‘As the Elizabeth Line opens, it does so with a backdrop of record rents in London, a rising cost of living and a shortage of available homes.

‘Areas further out from central London that have lower asking prices or rents, but are now more easily commutable will be attractive to new buyers and tenants in search of somewhere affordable to live near the capital.

‘Not only this, but new working from home patterns since the pandemic started two years ago will have many people weighing up whether they are prepared to commute from further away if they need to do so less often.’

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National Maternity Hospital decision is a welcome sign of the Government’s backbone

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The Government’s decision to proceed with the building of the new National Maternity Hospital is a welcome sign that the Taoiseach and his Ministers are willing to face up to the Opposition, the social media mob and assorted objectors on an issue of major national importance.

One of the weaknesses of the Coalition since it took office in June 2020 has been a tendency to run scared in the face of contrived outrage, usually fomented by a combination of Opposition politicians and vested interests, often mistakenly portrayed as representing public opinion.

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URW rolls out Westfield brand to three new destinations

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Unibail-Rodamco-Westfield (URW) unveiled plans to rebrand three flagship centres, rolling out the Westfield brand to Parquesur in Madrid, Taby Centrum in Stockholm, and Galeria Mokotow in Warsaw this fall. The rebranding continues the expansion of the Westfield brand in Europe as the company drives new revenues through media advertising and brand experiences, turning its huge footfall of 550 million visits across its European assets into a qualified audience, while also leveraging the Westfield brand’s significant value to retailers, who see over 20%2 higher sales at URW’s centres even when compared to other A-category malls.

 

The flagship destinations share a number of characteristics in addition to being among the most important retail centres in their respective markets: they are set in excellent locations with unrivalled transport options, have distinctive architectural and design features and a best-in-class approach in terms of customer experience, community engagement, and sustainability practices. To celebrate the launch of the Westfield brand at these assets, each destination will host festive consumer events which will be announced later this year.

 

Caroline Puechoultres, Chief Customer Officer of URW, said: “The rebranding of these centres continues our strategy to expand Westfield to Flagship European destinations in the wealthiest cities and catchment areas. The significant opportunity afforded to both retailers and brands by this increasingly digitally linked network of destinations is unparalleled – through Westfield our partners can reach tens of millions of European consumers, driving new possibilities in advertising, brand marketing and retail.”

 

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