Homebuyers gazumped out of over £200 million annually

English home buyers could be forking out up to £290 million annually in pointless surveys, searches and lawyers’ fees after being gazumped at the last hurdle, according to a new study from leading independent personal finance website Fool.co.uk.

With house prices rising at 0.4% in the last quarter, the market is becoming increasingly competitive. A study of over 2,000 homeowners reveals that over one in 10 (12%) had been gazumped in the last year - 12% of which have been gazumped more than three times in their search for their dream home.

Despite many homebuyers experiencing the negative effects of gazumping firsthand, many seem resigned to the phenomenon, with over a fifth (22%) admitting they have or would consider gazumping if they found their ideal property and almost over in 10 (11%) citing it as a ‘necessary evil’.

The study also revealed the following:

Almost three quarters (73%) of homebuyers think gazumping should be made illegal

Over one in 10 (12%) of homebuyers who’d been gazumped were upset enough to stay out of the housing market and remain in their current property

Almost a quarter (24%) admitted they were emotional, angry and humiliated following their gazumping experience

Financially serious

Gazumping victims can have a hard time financially following the experience. Almost a third (28%) said that as well as losing time, they were left seriously out of pocket and 12 per cent were forced to up their bid in order to secure the property. Over one in ten (12 per cent) had to settle for a lesser property after they’d been gazumped.

Gazumping can cost up to £1,900 and include:

Lawyer fees – £1,500
Local authority search – £220
Drainage search - £44
Environmental searches - £34
Indemnity insurance contribution - £25
Chancel liability search - £18
Official search - £9

Emotionally impactful

As well as financial implications, gazumping can hit many home hunters emotionally. Almost a quarter (24%) described feeling emotional, angry and humiliated after being gazumped and 29% said it made them rethink their house-buying strategy. Over one in 10 (12%) were upset enough to stay in their current property and stay out of the housing market for a period.

David Kuo, Head of Personal Finance at Fool.co.uk, says: “For many people, the purchase of a house will probably be the biggest single acquisition they will ever make. It can take months of searching to find the ideal home and anything that dashes the dream can be emotionally draining, especially if it is the result of being gazumped.

“But it’s not only emotions that get hurt when you are gazumped - finances can take a battering too. Consequently, it is important to minimise the chances of being gazumped, though it is not possible to eliminate the risk completely.

“It is sometimes said that gazumping is the price we pay for free market competition. But while competition can often draw out the best price for a product, it can also bring out the worst in people.”

Fool.co.uk’s Top Tips for Getting One Up on Gazumpers:

1. Get your finances in place early

2. Ask your vendor to take the property off the market once your offer has been accepted

3. Keep the seller’s estate agent informed at all times about the progress of the purchase

4. Stay in regular contact with the seller, and try and establish a bond – friendship is often more valuable than money

5. Do all you can to speed up the purchase – the faster the deal goes through the less chance your seller will pull out

6. Keep an eye on the property market especially if prices are rising quickly – being forewarned is being forearmed

7. Consider gazumping insurance