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House price falls lead to return of 'gazundering'
Jonathan Prynn, Consumer Affairs Editor16.05.08
An epidemic of "gazundering" is sweeping through London and now blights up to one in five property sales, estate agents said today.
The practice, which involves buyers slashing their offers at the last minute before exchange of contracts, is perfectly legal but widely seen as unethical and is bringing misery to thousands of anxious sellers.
Buyers justify it because they say the falling market means that originally agreed prices are no longer relevant when the contracts are ready to sign a month or six weeks later.
Agents say gazundering is now rife, particularly among aggressive young City workers with few concerns about walking away from a deal.
Ed Mead, of Douglas & Gordon, said: "The most likely gazunderer will be an investment banker, in fact anyone in the City, particularly a single bloke looking to show off to his girlfriend or vice-versa. It's reasonable to expect people to negotiate say £10,000 to £15,000 for issues such as damp but if the buyer is trying to get 10 to 15 per cent off, then you're into gazundering territory."
Mr Mead said that buyers were " trying it on" in about 15 to 20 per cent of property deals.
The phenomenon is affecting all levels of the market, from starter flats to Chelsea homes. The only exception is the £10million-plus top end, where prices are still rising.
Charles Puxley, associate director of Jackson-Stops in Chelsea, said: " London is not like the country. If you fall for that perfect rectory then you are unlikely to want to jeopardise that. But in London if you are after a threebedroom mansion flat and the deal falls through you know that, like London buses, there'll be another one along soon. We had a double gazunder the other day in Westminster. The price was agreed at £2.5million then it came down to £2.2 million, which my client agreed to reluctantly, then the buyer dropped the price to £2.1million at which point my client withdrew."
Gazunderers claim the practice is a natural reaction when you are worried about paying too much. Christian Blavier, a sports massage therapist who tops up his income through property, agreed to buy a three-bedroomhouse in Hoxton from an elderly seller for £320,000.
As property prices slumped, he cut £30,000 from the offer, which lost him the house. Mr Blavier, 39, told Bloomberg News: "I've gazundered a 70-year-old woman who is undergoing a hip replacement - you can't get a scenario to make you feel more guilty. But this is not my hobby, it's what helps me make a living."
'We felt cheated by Dancing On Ice host'
TV PRESENTER Holly Willoughby and her husband were accused of gazundering after agreeing to pay £1.645 million for a Victorian house in Wandsworth.
On the already delayed day of exchange, they dropped their price by £45,000, citing damage from a bath that had overflowed.
Dancing On Ice host Willoughby, 27, and husband Dan Baldwin denied the manoeuvre was gazundering saying it was standard postsurvey negotiation. But sellers Amanda Purves and Iain Sanderson, who were by then committed to buying a £2.25 million home in Suffolk, said they felt "cheated".
Ms Purves, who works in property PR, said: "It felt appalling. Why couldn't they have just made an offer and stuck with it?"
In the end, the two couples agreed to split the difference and the agreed price was reduced by £22,500.
Reader views (4)
Make the silly fools eat their money - sellers and buyers.
- Frederick, London
It's a buyers market now, what did people expect? If people overvalue their homes that's their tough luck.
- Chalse, London
The problem is that houses are over priced and vendors believe that that is the true value. Gazunderers are simply finding a way to pay the correct price.
- Andy, London
Oh dear, my heart bleeds - sellers have been doing this for years to buyers who were leveraging mortgages and moving heaven and earth to afford the house they thought they were going to get only to be gazumped - which isn't *ahem* immoral in any way compared to suddenly dropping your asking price when the market is plummeting around your ears?
- Neil, Barbican
