Gazumping was so 2022, get ready for gazundering to dominate 2023

From one extreme to another. In what feels like a lifetime ago, but was in fact just a few months back, gazumping was one of the key issues facing the property market. Buyers, with an agreement already secured, risked seeing a rival swoop in at the last minute with a higher offer.

But market dynamics have done a 180. Sellers held power in the summer months. Property demand was so intense, they had the luxury of holding out for better offers.?Now, buyers appear to have the upper hand. Property pundits are reportedly fearful of gazundering tactics emerging, as everyone tries to avoid a race to the bottom.

Buyers could attempt to secure last-minute discounts at the point of exchange. With property prices on the decline, sellers may be tempted to limit their losses before things get worse. Portfolio holders who felt smug in the sun may have underestimated the chances of a colder winter. However, it’s not all bad – supply is still outpacing demand so those that can move quickly will still be king.

I don’t know about you, but I wish the news was boring again. It’s exhausting going from one crisis to another. But, while there’s not much you can do about the headlines, you can at least try to protect your future. In the 2nd quarter of 2022, MFS produced research exploring the prevalence of gazumping and gazundering in the market. We not only saw how commonplace these tactics were, but where they’re likely to occur.

Gazundering has been an issue for a while now. Nearly 80% of our respondents felt gazumping and gazundering tactics had become more common in recent years due to the mismatch between supply and demand. Of the people we surveyed who had bought a property in England or Wales since 2012, 21% admitted to gazundering a seller.

London was by far the worst location for this, where nearly half (47%) of respondents said they gazundered someone. We could see more of this emerge in the capital, with property prices falling in real terms. Gazundering has also been an issue in the North East of England (36%), the North West (26%), and the West Midlands (22%).

One of the few things that’ll likely become clearer over the coming months is the crucial role specialist finance plays in the market. High street banks are struggling to keep up with rate hikes, a cost-of-living crisis, and conflict in eastern Europe. How are they supposed to react to last minute changes in offers? They’ve pulled deals by the thousands in recent months, and changes in an agreed price, whether an increase or decrease, may force them to renege and reassess.

What property investors will need is a lender who can remain flexible. Here at MFS, we can move quickly and adapt to complications as they emerge. We’ve supported clients who’ve faced all kinds of unexpected problems. We can work with CCJs, broken chains, and even foreign buyers. If prices shift at the last minute, we can shift with them and still allow you to move quickly to take advantage of new opportunities.

We’re here to help keep the market afloat until normality returns. We’re ready when you are.