Ghost- Gazumping hits London Buyers
Mon 24 Mar 2014
House sellers in London are increasingly raising the asking price of their property at the last minute - even though there are no rival bidders, it has been reported. 'Ghost gazumping' is an aggressive practice which sees estate agents in the capital urging sellers to put up the price of their house shortly before contracts are exchanged. Estate agents have been reported to door-knock sellers whose homes have been under offer for more than eight weeks, and then to convince them that the offer they have agreed on is too low. Experts said this is a worrying new trend which has never been seen before, not even during the 1980s and 2000s property bubbles. Not been around before Dominic Agace, chief executive of Winkworth Estate and letting Agents, said: "It's something that has not been around before. "We obviously have had gazumping in the past but this is not something I have ever seen until now." In some instances, he said, prospective buyers are having to pay additional six-figure sums on top of the agreed price to avoid finding themselves back on the property hunt. Mr Agace cited one deal involving a 1m property in which the sellers suddenly asked for an extra 100,000 - and the buyers agreed to pay.
He said the practice was more and more common in sought-after London suburbs such as Shepherd's Bush, Twickenham, Dulwich and Kensal Rise. 'I thought it was completely unethical' Andrew Ince, a 45-year-old driver, was set to buy a property in Chigwell, east London, but the price was increased by 20,000 just before the exchange of contracts. Mr Ince told the Financial Times: "I thought it was completely unethical. I flipped and said 'no way'." It used to be common in the 1980s for property buyers to be gazumped at the last minute by a rival bidder who would make a higher offer just before the exchange of contracts. However, the current housing market in the capital - with such high demand for a small number of properties -seems to lead sellers to put up their asking price despite there being no rival bidders. Huge demand for property Peter Rollings, chief executive of Marsh & Parsons estate agents, said: "It's now very common and a depressing factor of a market with low supply and monster demand." Mark Hayward, chief executive of the National Association of Estate Agents, also said that 'ghost-gazumping' was a consequence of a huge demand for property but not enough supply. However, 'ghost-gazumping' also shows that the London housing market has improved significantly since the credit crunch.