Gazumping rates are increasing across the nation

As market values grow across the UK, from 13 percent in 2015, to 36 percent this year, recent studies have found a steady incline in gazumping rates. Gazumping being when a property seller accepts a higher bid after having already agreed to a bid from a different buyer - the initial bidder has consequently been gazumped from the sale.

Peter Wetherell, CEO of Mayfair estate agency Wetherell, explains that the process of gazumping often happens on highly coveted properties, usually in high demand because of the desirable price, convenient location, or exceptional quality. The value could be attractive from either end of the scale - either an extremely affordable starter home or ultra-prime luxury pad, which a potential buyer is willing to bid a higher price for.

Although frustrating, and often disappointing for the original bidder, gazumping is a legal element of the house buying process in Britain and the best way to avoid it as a buyer is to act quickly and ensure all paperwork and finances are organised as efficiently as possible.

THE CAPITAL GETS HIT HARDEST

Veiled with uncertainty over the last two years, the political and economic climates in the UK have had a significant effect on the real estate market. House prices and demand have been rising, yet the number of transactions has fallen as homeowners are wary of listing their homes and buyers are cautious. New properties entering the market has also been declining.

The data revealed the frequency of gazumping rates around the UK and found that buyers in London are affected the most. A notable 35 percent of buyers have been gazumped in the capital since 2015, which is more than double the rate in the South East, which is in second place at 16 percent. These results are perhaps expected, with both the capital and South East regions home to the most luxurious properties in the country and some of the most expensive in the world. The current average house price in London is £481,345 and in the South East is £315,807; both of which are significantly higher than the nationwide average of £220,084.

Third in the list is the North West, with nine percent of buyers experiencing the disappointment of being gazumped since 2015, followed by seven percent in the West Midlands, and six percent in Yorkshire - all areas with much lower average house prices than in the South East and London.

Least affected by the effects of gazumping is Scotland, with only one percent of buyers affected. Although it's often thought to be illegal in Scotland, it is still a legal element of the buying process. However, Scottish law classes it as an act of misconduct if a solicitor selling a property continues to act for the seller if they accept a higher bid after already accepting a lower one. If a property seller in Scotland used a solicitor in England or Wales, however, this would not be an issue and is why gazumping can still happen in Scotland, albeit at a minute rate.

TOP TIPS TO AVOID BEING GAZUMPED

There are things a buyer can do to minimise the risk of being gazumped from a sale. A cash offer will almost always come out on top as the transaction can complete the swiftest. However, if a mortgage is required, which will be in most cases, ensure there is one agreed in principle. This is the main part of the mortgage application that states they are likely to be accepted for the finance, the only time a mortgage in principle would not work out is if there is an issue with the property itself, such as the state of repair, or the information about income and expenses given initially cannot be proven at a later stage. A realistic offer should also be a high priority when purchasing a home.

Property chains can also cause delays and therefore increase the chances of a higher bidder coming along, so if the buyer is selling a property, this should be completed as soon as possible.

Lastly, a good rapport between the buyer and seller is often underrated, but very useful. Usually, a homeowner will be attached to their property and want to see it go to someone who will look after it and make use of it in the best way possible. There have been instances when vendors have accepted a lower offer because of the person, rather than the bid amount.