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Surprise rise in sales brings back gazumping, says estate agent
Jonathan Prynn14 May 2009
A spring stampede in the London property market has brought back “boom time” gazumping, sealed bids and non-returnable deposits.
Agents say they have been astonished by the transformation in mood over the past two months and predict that in some parts of the capital prices have now touched bottom.
It brings an end to almost a year of “brickormortis” when the number of house sales collapsed by two thirds and prices fell by around a quarter from the pre-credit crunch peak of 2007.
Ed Mead from London estate agency Douglas & Gordon said: “Sales have almost doubled since this time last year. Sellers are starting to get panicky because they are concerned we are at the start of a sustained rally and they might miss out. There is a herd mentality among buyers: people are thinking we're going to miss the boat.' ”
Buyers are being tempted back to the market by lower prices, cheap mortgage rates and some relaxation in lending terms by high street banks and building societies.
The days of “cheeky offers” appear to have gone and purchasers are having to re-learn the sense of urgency that marked the peak years, say agents.
Peter Rollings, managing director of central and west London agency Marsh & Parsons said: “Gazumping has made a comeback in the past few weeks as there is a severe shortage of stock and a huge amount of interest from cash buyers at all levels of the market.”
Meanwhile, the epidemic of “gazundering” — buyers agreeing a price and then threatening to walk away unless the vendor agrees to a reduction — has all but died out.
Although the competition is most intense in prime London areas such as Kensington and Chelsea, many other areas are seeing property green shoots.
Alex Inskip, sales manager at Kinleigh, Folkard & Hayward in Wimbledon said: “We recently saw a case of a surveyor down-valuing a property from £655,000 to £625,000. After negotiation the buyer made up the difference and the sale has progressed to the original asking price. This just goes to show the pressure that buyers are under to stave off competition.”
Mr Mead said: “We have sold a one bedroom flat in Old Church Street near the King's Road, which would have been worth £595,000 to £600,000 at the peak. We put it on at £585,000 and thought we would be lucky if we got anything with a five at the front. It has gone to a German woman for £640,000 with four bidders competing. That would have been unthinkable two or three months ago.”
David Jones, 37, a City banker who lives in Clapham, put his four-bedroom house on the market two weeks ago at £895,000. He thought it would take up to six months but it sold within 10 days.
He said: “We couldn't believe it, there would be queues outside the door. The winning bid was for £900,000.”
A spokesman from agency Hampton International said: “The power is moving back to vendors and new stock is needed to meet demand.”
Reader views (18)
As its well know that estate agents neither lie or exaggerate, it must be time to BUY! BUY! BUY!
- Trevor, Southend UK, 14/05/2009 23:04
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Gazumping is indeed back. Where a house is competitively priced, it is receiving lots of interest and multiple offers and, yes, gazumping too.
- Martina, London, 14/05/2009 17:28
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I am not comparing the suburbs to Chelsea, I just think that when people work hard for their money why waste so much of it on just a one bedroom flat when you can get more for your money by moving a bit further away and still be able to work and go out in London?
- Louise, London, 14/05/2009 17:10
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Louise, I agree she is an idiot for paying that for a one bedroom, but comparing the suburbs to Chelsea is a different ball game, in fact its a different sport...
- Mike, London, 14/05/2009 15:51
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Nonsence!!! What a load of estate agent propaganda - they, together with certain reporters, must believe the public are a bunch of monkeys! Get real, the fundamentals are all wrong - gazumping my rear end!
- Chicken Little, Essex, 14/05/2009 15:15
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"Mr Mead said: “We have sold a one bedroom flat in Old Church Street near the King's Road, which would have been worth £595,000 to £600,000 at the peak. We put it on at £585,000 and thought we would be lucky if we got anything with a five at the front. It has gone to a German woman for £640,000 with four bidders competing" What an idiot paying so much for a one bedroom flat. You can get a lovely five bedroom house in the suburbs of London for that same money!
- Louise, London, 14/05/2009 14:57
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THE LAW MUST BE CHANGED TO STOP THIS NONSENSE! ONCE AN OFFER HAS BEEN ACCEPTED IT SHOULD BE FINAL AND IF EITHER SIDE PULLS OUT THEY SHOULD REIMBURSE THE OTHER 10% OF THE PRICE.
- Michael Two, London, 14/05/2009 13:58
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Please note this is all with CASH buyers. Who has the cash to buy a house? only developers.
- Stephen, London, UK, 14/05/2009 13:43
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What ridiculous statements! They really want to take a look outside their shop doors and see what's happening. As for paying £640,000 for a one-bed flat, it just proves that there is still a small minority of people with more money than sense.
- Fanfan La Tulipe, London, 14/05/2009 13:34
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What with the rise in unemployment, and the fact that we are still in a recession with more recent announcements of more job losses, who exactly is buying the properties?
Most people I know are still unable to move as they are unsure as to whether they will have a job in 6 months.
It's all very well estate agents saying it's picking up. They, as with most sales people will say anything to try and encourage people to buy. We've been paying far too much for property purely out of greed and a post code.
My wife has been keeping an eye on the market ever since we pulled out of a move early last year and there have been properties on the market for at least a year that can't sell. In addition, I don't think an increase in sales in Chelsea & Kensington reflects the true market within London or elsewhere.
Property prices should fall to a realistic level, not one that suits the pockets of estate agents and developers.
- Alan, East London, 14/05/2009 13:18
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We need tighter regulations in the housing market also. This whole gazumping thing, actively encouraged by estate agents so they receive a higher cut, is akin to bankers bonuses.
- Frank, Home Counties, England., 14/05/2009 12:58
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Typical estate agent spin.
- Bob, london, 14/05/2009 12:58
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Not sure if this is a PR coup, its widely know that property prices will still fall
- Mario Kempe, london, 14/05/2009 12:58
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Every month, this same old article is rehashed with different areas and quotes from different agents. It is usually followed a few days later by articles on non existent mortgage lending and agents closing down.
Ed Mead from London estate agency Douglas & Gordon said: “Sales have almost doubled since this time last year. Sellers are starting to get panicky because they are concerned we are at the start of a sustained rally and they might miss out. There is a herd mentality among buyers: people are thinking we're going to miss the boat.' ”
Sales have doubled. Dont make me laugh Ed, they have probably doubled from one a month to two.
A couple of mortgage brokers i know, are on their hands and knees, i think that gives a much clearer picture of what is going on.
- Jon, Radlett, 14/05/2009 12:58
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I think you guys will notice that most of the examples are foreign buyers 1 British pound = 1.11 Euros, and cheap against a lot of currencies. The pound will not stay at this level for long, and to be honest nor will interest rates.
- John, London, 14/05/2009 12:58
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If this is a true story it proves the saying that there is a mug born every minute. Will people ever learn common sense?!
- Jb, London, 14/05/2009 12:58
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A really pathetic attempt by estate agents to create a sense of things getting back to "normal". Nice try, but the prices WILL keep falling and there is nothing you guys can do about it... 
- Max, Tonbridge, 14/05/2009 12:58
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These estate agents think we are all mugs. It's the foreigners who are buying. They just cannot wait to get back to the bad old days of over priced under value homes for a further age of debt and depression.
- Freddie, London, 14/05/2009 12:58
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