The property market has observed a rising trend of gazundering, particularly in specific regions, as house prices see a decline. This practice, wherein buyers lower their offers just before the sale completes, is putting sellers in turmoil and endangering numerous property chains.
Sophie Pollard, Director of MyHaus Brighton estate agents, identifies changing mortgage rates and products as core reasons for chain disruptions. Speaking to Newspage, she mentioned: “Where offers have been made based on mortgage-in-principles, once it comes to crunch time they are no longer feasible or available.” She also emphasised the importance of collaboration among estate agents for mutual benefits and said, “The market is different so we need to update our approach. I think if competition and ego can be put aside for a second, more of these chains won’t fall through and negotiations can be made on either side to get the desired outcome.”
Highlighting the escalating rate of gazundering, Kundan Bhaduri from The Kushman Group based in London, stated, “Gazundering is on the up as are failed surveys due to down valuations. Archaic conveyancing taking forever doesn’t help with the complexity involved in long chains, either.” Bhaduri further pointed out that several factors are causing fragility in property purchase transactions, with media portrayal playing a significant role. He noted, “If I had to pick one reason, it is public confidence in the market that is driving this state of the market, and often negative stories in the media play a big part.” Additionally, he shed light on sellers retracting properties, hoping for better offers in the future, while some buyers sway towards more appealing or economical options.
Adding to the discussion, Lewis Shaw of Shaw Financial Services remarked on the increasing occurrences of gazundering, saying: “Gazundering is proving increasingly common at the moment. At the eleventh hour, buyers are trying to pull a fast one and that’s crippling chains. On the whole, chains are taking too long, all parties are getting hacked off and some are calling it a day.”