The Inside Edge
Now, you’ve probably heard of gazumping and gazundering, but a new kid is in town that is threatening to damage the property market: gazanging. This phenomenon is caused by a volatile housing market, and the lack of available property, and involves sellers pulling out at the last minute. Notice we said ‘sellers’ there and not buyers.
Research from the legal property website In-Deed has found that over 54,000 homebuyers faced gazanging in the first half of 2011 because vendors changed their mind and decided they didn’t want to sell after all. The website, also reported that the incidence of sellers pulling the rug from under buyers’ feet had risen by 20% in the first half of 2011 and was more likely to affect homebuyers than gazundering or gazumping.
Gazanging can have a huge effect on a property chain depending on which stage the gazanging happens. Let’s say a seller pulls out just before exchange of contracts. That’s a lot of money that everyone has paid out on surveys, conveyancing costs and other expenses. An under-supply of suitable homes and an unstable property market are the most common drivers of gazanging with many sellers blaming ‘cold feet’ as their reason for staying put.
Figures released by the National Housing Federation (NHF) aren’t too promising and show just 105,000 homes were built in England between 2010 and 2011 – this is the lowest level in almost 100 years. House sales also dropped to a two-year low in August according to the Royal Institute of Chartered Surveyors who also claimed that buyers were avoiding buying property due to a fear of falling house prices in the future.
Harry Hill, founder of Rightmove and former chief executive of Countrywide estate agents, said: “What we’re seeing at the moment is uncertainty in the housing market and poor consumer confidence giving sellers cold feet. Buyers can’t do much about the economy, but regardless of the state of the market, poor property legals continue to compound such problems, though this is easily avoided.”
There are no laws regarding gazanging and you could find yourself on the receiving end of a seller pulling out, but the good news is that this is unlikely once you have exchanged contracts. If you have reached this stage when buying your new home then the seller will be liable to quite expensive fines and to pay compensation to you if they decided they don’t want to move after all. If you are thinking of selling your home, think before you put that For Sale sign up. Do you really want to move? Can you afford to move? Asking yourself these questions now will save a lot of stress and heartache for yourself and others later.