This is costing British homebuyers £290 million each year in surveys, searches and lawyers’ fees which are rendered useless by other buyers cutting in at the last minute.
Fool.co.uk has found that this is the unfortunate result of an increasingly competitive housing market, with over one in ten buyers falling foul of gazumpers in the past twelve months. For a huge number of these it’s not the first or even second time either, with 12 per cent suffering more than three times.
Despite many homebuyers experiencing the negative effects of gazumping firsthand, many seem resigned to the phenomenon, with over a fifth (22 per cent) admitting they have or would consider gazumping if they found their ideal property and almost over in 10 (11 per cent) citing it as a ‘necessary evil’.
The research found almost three quarters of homebuyers think it should be outlawed, while 12 per cent of gazumpees were upset enough to stay out of the market and remain in their current property.
Gazumping victims can have a hard time financially following the experience. Almost a third (28 per cent) said that as well as losing time, they were left seriously out of pocket and 12 per cent were forced to up their bid in order to secure the property.
Gazumping can cost up to £1,900 including legal fees, five different types of search and a contribution towards indemnity insurance.
David Kuo, head of personal finance at Fool.co.uk, said: “For many people, the purchase of a house will probably be the biggest single acquisition they will ever make. It can take months of searching to find the ideal home and anything that dashes the dream can be emotionally draining, especially if it is the result of being gazumped.
“But it’s not only emotions that get hurt when you are gazumped - finances can take a battering too. Consequently, it is important to minimise the chances of being gazumped, though it is not possible to eliminate the risk completely.
“It is sometimes said that gazumping is the price we pay for free market competition. But while competition can often draw out the best price for a product, it can also bring out the worst in people.”
