Homebuyers are being gazumped due to lengthy property chains and delays in getting a mortgage, research from Market Financial Solutions has suggested.
The research, which surveyed 1,183 people who have bought a property in England and Wales since 2014, reported that 37 per cent had been gazumped during the process.
Of those, 59 per cent said they were gazumped, at least in part, because of delays or long waiting times in getting a mortgage.
A further 58 per cent of respondents said they were gazumped on a property as they were waiting for a buyer for their property.
More broadly, 54 per cent of those who have been gazumped cited being caught in a long property chain as a “significant” factor.
Gazumping is when a property is sold to a second buyer for more money than has already been agreed with the first buyer.
Market Financial Solutions CEO, Paresh Raja, said: “Much is made about the root causes of gazumping, namely the fierce competition there is in the market due to an imbalance between supply and demand.
“But in looking for the cause, we often overlook the emotional and financial impact that gazumping can inflict.
“Throughout the purchasing journey, prospective buyers often develop a strong attachment to a property, making the sudden collapse of a deal particularly difficult to stomach."
Raja added that, on top of that, thousands of pounds are typically lost when a deal falls through which “rubs salt in the wound”.
“Clearly, with lengthy property chains and mortgage delays cited as key factors behind people being gazumped, there are lessons for lenders, brokers and agents,” he continued.
“All parties must work together to reduce the risk of delays and ensure that buyers can secure finance at pace.
“In turn, this will help close the window of opportunity for gazumping tactics and minimise the emotional and financial impact on would-be buyers.”
The survey also shed light on the financial and emotional toll of being gazumped, discovering that 62 per cent of people said they missed out on their dream home, and 61 per cent were forced to buy a property that they liked less.
In addition, a majority (59 per cent) of people lost money they had invested in the property-buying process, such as survey costs and legal fees.
tom.dunstan@ft.com
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