Mortgage Delays and Property Chains: The Hidden Causes of Gazumping

The UK’s housing market has long been plagued by the issue of gazumping, where a seller accepts a higher offer on their property after already agreeing to sell to another buyer. But what are the underlying causes of this frustrating phenomenon? According to research from Market Financial Solutions (MFS), mortgage delays and property chains are two of the primary culprits.

Image: Mortgage delays can lead to gazumping

A staggering 37% of homebuyers have been gazumped during the buying process, with 59% of those citing delays in getting a mortgage as a major contributing factor. Meanwhile, 58% of gazumped buyers were stuck waiting for a buyer for their own property, highlighting the complex web of dependencies that can lead to gazumping.

“Much is made about the root causes of gazumping, namely the fierce competition there is in the market due to an imbalance between supply and demand. But in looking for the cause, we often overlook the emotional and financial impact that gazumping can inflict.” - Paresh Raja, CEO of MFS

The consequences of gazumping can be severe, with 62% of buyers missing out on their dream home and 61% forced to settle for a less desirable property. Furthermore, 59% of buyers lost money invested in the property-buying process, such as survey costs and legal fees.

Image: Property chains can lead to gazumping

So, what can be done to mitigate the risk of gazumping? The answer lies in improving the efficiency of the mortgage application process and reducing the complexity of property chains. By streamlining these processes, buyers can reduce their exposure to the risks of gazumping and secure their dream home.

In related news, the value of new mortgage commitments has seen a 30.8% increase in Q1, according to the Bank of England. This surge in mortgage lending is a positive sign for the housing market, but it also highlights the need for lenders, brokers, and agents to work together to reduce the risk of gazumping.

Image: Mortgage lending is on the rise

As the housing market continues to evolve, it’s essential that all parties involved work together to create a more efficient and transparent process. By doing so, we can reduce the incidence of gazumping and make the homebuying experience less stressful and more enjoyable for all involved.