Gazundering: the trend shaking up the property market

One in three house sellers are falling victim to a frustrating property market trend: "gazundering".

In the past six months, 31% of vendors have been gazundered, which is when a buyer reduces their accepted offer just before contracts are signed and exchanged, according to research by House Buyer Bureau.

In some dialects, a "gazunder" was a potty that "goes under" the bed, explained The Guardian, but it "has a different meaning now, and this one is far worse".

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It is "the opposite of gazumping", said FT Adviser, "which becomes more frequent when the market favours the seller".

Gazundering has seen a 97% increase in internet search interest since the start of the year, said estate agent comparison website GetAgent.co.uk, noting that cooling house prices mean the power is now "very much in the hands of the nation's homebuyers".

Why does gazundering happen?

Gazumping, where someone puts in a higher bid for a property that is already under offer to another buyer, "used to be quite common" and is in some ways a "sign of a successful economy", said The Guardian. 

Now it is a "buyer's market" with less competition, and so sellers have little choice when their purchaser drastically reduces their offer at the last minute.

House prices unexpectedly increased in October, but overall home values have been "hurt" in 2023, said Sky News business reporter James Sillars. This is due to the "impact of the continuing cost of living crisis and surge in borrowing costs", imposed by the Bank of England to tackle inflation. According to RightMove, the average two-year fixed term, 95% loan-to-value mortgage rate is now 6.22%. Rates are expected to remain high until summer 2024.  

House prices hit a 150-year-high last year, with the average house costing around nine times the average salary. This looks set to change. Zoopla predicts that, in 2024, house prices will fall by 2%, partly driven by high mortgage rates, but also because the number of homes for sale is at a five-year high.

Securing a buyer is therefore "a task in itself", Chris Hodgkinson, managing director of House Buyer Bureau, told Metro. As a gazundered seller, "there's really nothing you can do other than to accept the lower offer, or pull out of the sale completely".

How can a seller avoid being gazundered?

HomeOwners Alliance recommends setting a fair price to begin with, and being transparent about any issues so that offers are realistic. And where possible, favour chain-free buyers who can move quickly. 

Although estate agents and solicitors prefer the buyer and seller not to contact each other, building a relationship is a good way to ensure against underhand dealings. 

Sellers can also keep their houses on the market and continue to accept viewings until contracts are signed, advises Property Investments UK.

Ultimately, "there is something seriously wrong with the way that we buy and sell houses", wrote The Sunday Times money editor Johanna Noble last December. Legislation is needed, he said. Valuing a property amounts to "pretty much guesswork", and having an offer accepted "is no guarantee" of a sale. "It’s like the Wild West out there."