Housebuyers gazumped in deals with NO rival bidders: Unscrupulous estate agents are persuading sellers to raise prices days before exchange of contracts
Sun 16 Mar 2014
'Ghost gazumping' sees sellers increase house price days before exchange. Some paying additional six-figure sums to avoid finding another property.
Comes amid fears of a property bubble - which some say was feulled by Government's Help to Buy scheme. Property buyers in London are increasingly being gazumped by sellers who are raising property prices at the last minute despite there being no rival bidders.
The new phenomenon of ghost gazumping sees unscrupulous estate agents persuading sellers to increase their house price by tens of thousands of pounds just days before the exchange of contracts. The aggressive new practice comes amid fears of a property bubble, fuelled in part by the Governments Help to Buy scheme.
Estate agents revealed this new trend had never been seen before - even during the property bubbles of the 1980s and mid-2000s. But with house prices rising, buyers are having to fork out up to six-figure sums extra just to avoid finding a new house.
In the nations capital, rival estate agents have been door-knocking sellers - whose properties have been under offer for more than eight weeks - and telling them the offer they have agreed is too low.
In the 1980s, property buyers would often be gazumped by rivals who would step in with a higher offer at the last minute. But with such high demand for a small number of properties, sellers are increasing their property price
despite there being no rival bidders.
Typically, this ghost gazumping occurs several weeks after an initial offer has been accepted. Dominic Agace, chief executive of Winkworth, said: Its 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. He said it was an increasingly common trend in London suburbs, such as Shepherds Bush, Twickenham, Dulwich and Kensal Rise. In one deal, he claimed, sellers went back on the previous deal of 1m and asked for an extra 100,000 - with the buyers agreeing to pay the higher amount.
Andrew Ince, a 45-year-old driver, told the Financial Times that the price of a house he was buying in Chigwell, east London, was increased by 20,000 just before the exchange of contracts. He said: I thought it was completely unethical. I flipped and said "no way".
Peter Rollings, chief executive of Marsh & Parsons estate agents, said: Its now very common and a depressing factor of a market with low supply and monster demand. But the new trend also suggests that the housing market has improved significantly since the credit crunch - when property prices in some London boroughs fell sharply. According to Mark Hayward, chief executive of the National Association of Estate Agents, the phenomenon was a symptom of a huge demand for property but not enough supply. He said: Its not necessarily greed; if people think they can get more, they will try. Mr Hayward added that the trend was limited to London and the southeast. The Governments Help to Buy scheme assists buyers of homes worth up to 600,000 if they have only a small deposit of 5 percent.