Gazundering: A Growing Threat in UK Property Sales

Gazundering, a practice where a buyer reduces their agreed-upon offer moments before the final exchange of contracts, is becoming a more significant issue in the UK property market. This tactic exploits the fact that in England and Wales, offers are not legally binding until contracts are exchanged, a process that can take an average of 120 days to complete.

According to the Ministry for Housing, Communities and Local Government, approximately one in three house sales fall through before this final stage, costing sellers an estimated £400 million annually and impacting the wider economy by £1.5 billion.

Sarah, a seller who wished to remain anonymous, described her experience: "My buyers dropped their offer by £15,000 the day before exchange." This move put her under immense pressure to accept the lower price, risking the collapse of her entire property chain and the loss of the home she intended to purchase. After consulting with her family, Sarah decided to relist her property. The following day, her original buyers returned, agreeing to the initially agreed-upon sale price. "Gazundering is actually awful. It's not just a business deal. It's my children's home and the fact that nothing's been done about it is ridiculous," she stated.

Beth Rudolf from the Conveyancing Association noted that gazundering is a "small but growing problem" that has seen an increase due to shifts in the property market, creating a buyer's market. With more properties available than prospective buyers, sellers face increased competition, often leading to price reductions.

To combat issues like gazundering, the government has announced plans for reforms to the house buying and selling market in England and Wales. These reforms aim to introduce legally binding agreements that would penalize buyers who withdraw from a sale without a valid reason at the last minute. The proposed timeline for these reforms extends to the end of the current parliament, which concludes in 2029. The Ministry for Housing, Communities and Local Government has stated that these measures will "stop gazundering by introducing legally binding agreements that prevent buyers from walking away at the last minute without a valid reason, with fines for those who do."