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Gazundering is a significant problem for buy to let landlords looking to exit the private rental sector.
A new study, undertaken by YouGov on behalf of the HomeOwners Allicance and homebuyer IMMO found that most property sales fall through each year as a result of buyers changing their minds. This collectively costs sellers around £400 million annually.
Of those affected include a number of buy to let landlords who the survey found plan to leave the private rental sector due to concerns about the housing market, changes to tax and increasingly stringent mortgage lending conditions. However, selling properties is harder than assumed, with 300,000 transactions falling through each year. This costs affected sellers an average of £2,700.
The survey, which explored the experiences of home sellers, found that 20 per cent of sellers have experienced a sale collapse. 15 per cent of those incurred average costs of £2,727.
69 per cent of the home sales that fell through did so due to buyer related issues, including the purchaser changing their mind. The research found that uncertainty relating to this might put people off selling. 8 per cent of those who suffered a failed sale experienced gazundering, which is when the buyer lowers their offer just before the exchange of contracts.
Chief executive of HomeOwners Alliance, Paula Higgins, explained: ‘We often hear about would-be buyers losing their dream homes as a result of sellers accepting higher offers but less is said about sellers forking out thousands in wasted fees only for buyers to change their mind, leaving the seller back at square one. Gazundering and time wasting is a huge problem. The homeselling system is so unreliable it’s deterring homeowners from selling – adding to the ongoing housing shortage crisis as a lack of suitable homes is one of the barriers to people moving up the property ladder.’
Co-Founder of IMMO, Samantha Kempe, added: ‘The current system has created a fundamental power imbalance between the seller and the buyer, with the seller often at the buyer’s mercy during what is often the largest financial decision of their lives. Sellers should be able to proceed with the sale of their property knowing what price they will receive and feeling assured that the sale will go through.’