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Last Updated: Saturday, 12 February, 2005, 17:43 GMT
First-time buyers may 'gazunder'
House sale signs
First-time buyers feel now is a good time to get on the property ladder
A third of first-time home buyers may cut their offer at the last minute, forcing the seller to take less or find a new buyer, a survey has found.

In total 31% would consider "gazundering", reflecting first-time buyers new-found confidence in a slowing market, says Yorkshire Bank.

A third of first-time buyers also felt they could be choosier, it found.

Yorkshire Bank's Gary Lumby said the number prepared to drop their offer was a "worrying proportion".

Confidence returned

"Unfortunately, a downside to this new-found confidence gained from a slowing market has emerged," he said.

"A worrying proportion of first-time buyers would be prepared to drop their offer at the very last minute of the house buying process, leaving the seller in a quandary over whether to take the financial blow or to go through the hassle of putting the house back on the market."

The Housebuyers Survey, which questioned 2,000 people, also predicts that steadying house prices and the prospect of interest rates coming down look set to tempt more and more first-time buyers back to the market in 2005.

Now, 41% believe it is the best time to get on the property ladder in years and 36% feel the market is slow enough to risk offering less than the asking price.

"It's good news that the numbers of first-time buyers are beginning to rate more highly their chances of getting on the property ladder," said Mr Lumby.

"This growing return of confidence is partly down to prices slowing down, and in some cases falling, and the expectation that any further rise in interest rates will only be slight."


We asked readers for their views on gazundering. The following comments reflect the balance of opinion we have received so far:

Gazundering is not a natural response to an overpriced market in any respect. This process preys on people in vulnerable positions, is immoral, and I am afraid will no doubt be deemed acceptable in the ever changing British society today (changing for the worse I am afraid to say). After buying my first house a few years ago, that process was stressful enough with no chain at either end, this practice should be illegal.
Scott, York, UK

I have lived in Scotland where instead of listing a high price and seeing what you will get the seller lists a price and asks for "offers over". Here in Canada, an offer can only be submitted by lawyer and is legally binding. Simple solutions that solve all the problems. In fact with the law as it stands a buyer could protect himself by only accepting offers made through a lawyer. And to all those who think "gazundering" is fair game whatever happened to honesty and integrity. Remember "what goes around comes around" - how would you feel if you were selling and someone did it to you!!
Max, London, Ontario

Some of the comments on here show just how little some people understand about how free markets operate. Just as sellers were able to name their prices during the recent increases in value so buyers and are justified in attempting to get the best possible deal now prices are slowing. It's no good crying 'unfair' when the market which benefited you before starts to correct itself.
Martin Hoscik, London

Funny how the table has turned eh? Nobody complained about first time buyers being priced out of their hometowns due to the bloated greed of homeowners, hiking up ridiculous asking prices in cahoots with equally bloated estate agents. But now it's them picking up the smelly end of the stick, their voices are as loud as ever. Things move in cycles, homeowners have had their time, now its the time for the first time buyers. Welcome to life.
Nathan Brown, UK

I have been an estate agent for 25 years. Gazundering and gazumping are both wrong and should be outlawed by changing our system of property transfer. Sadly the new "Sellers Pack" which the government are bringing in soon will not stop these practises even though MP are claiming it will! We need a system like The USA where a contract is entered into early on in the proceedings. Sadly the legal lobby will prevent this ever happening over here. Contrary to the impression your report gives, gazumping and gazundering are fairly rare outside the London market.
Chris Skelton, Horsham

I would consider gazundering - as one reader put it, home owners have had it good for so long it's about time they know how it feels to have a market unfairly tipped against you. At the moment the only people benefiting from all these ridiculously overpriced houses are the banks and estate agents with everyone else taking on bigger and bigger mortgages.
Mel, UK

It's outrageous. When is the government going to put an end to such practices? If you agree a price in good faith, you should be obliged by law to stick to it, and if one party doesn't, the other should be able to seek legal recourse.
Linda Simpson, Katonah, New York, USA

This practice is unfair to everyone involved in the process and could set a disturbing trend in what is anyway a difficult and expensive exercise, not to mention the stress involved in finding the dream home.
John Charles, Birmingham

I'm a potential first-time buyer and, yes, I would consider gazundering. I can't understand why people should thing it's unfair. After all, the housing market is naked capitalism! The market suited existing homeowners very nicely when prices were going up, despite pricing me out. Now the market is favouring me! And, boy, how I'm going to enjoy knocking back the ridiculously inflated asking prices of recent years!
Chris, London

When I have sold houses I have accepted an offer and that is fair. I would never have been so unscrupulous as to accept a higher offer after this point and nor would I expect any buyer to gazunder. If anybody tried that with me then I wouldn't go through with the sale anyway. They could have the inconvenience of looking for another property!
Vivien Cooke, Hants, UK

A friend of mine was the victim of an attempted gazundering a few months ago. He played it very well - he nonchalantly said no - as if it was no problem at all, and there was a queue of other interested buyers, and when the buyer replied that they would pay the agreed price after all, he said: "I'm afraid the price has now increased by 5,000." The buyer paid up in full. A wonderful turn of the tables, and it served the buyer right.
Paul G Roberts, London, UK

Gazundering is a natural response to a hugely overpriced property market which is 50% over-valued. I saw it in the last crash and the coming crash will be no different.
Peter Anton, Beds

Friends of mine who were second up a chain have just been gazundered. They were forced to accept 5,000 less because they are moving to America, and the buyer of their property had just been forced to drop the selling price on his house. It's a vicious process - you've made plans and bought your next house based on assumptions about the agreed deal on the one you are buying and then it goes awry at the last minute and you are stuck.
Liz, London

Of course it's fair. Sellers have had it far too good for along time - houses are massively overpriced as it is. What's wrong with making an alternative offer just before the paperwork is signed? The seller always has the right to refuse. And in most cases the seller then "passes on" any shortfall when they become the buyer.
Bill, UK

I am an ex-pat living in the USA. I think there is something wrong with a selling process that allows last-minute price reduction without just cause. Over here a buyer is required to make a binding offer before the property is taken off the market. Such offer can only be rescinded or changed without penalty if seller had fault in their description of the property for sale.
Jon F Morris, Hartford, USA

My widowed mother was gazundered. The buyer went through the entire process, waited until she'd told the agents that the sale was done and removed the property from the market, then cut his offer knowing that she'd not want to go through all the rigmarole again. The law concerning property sales in England is an utter shambles, it's slow, expensive, unreliable and the only place where a contract appears not to be a contract. An accepted offer should be binding, not - as it would appear - just another part of the negotiating process.
Jeff, Telfor, UK





SEE ALSO:
'Renting is dead money'
24 Jan 05 |  UK
Help offer for first-time buyers
24 Jan 05 |  Politics
The struggle to buy a first home
24 Jan 05 |  Business
First-time buyers face price woe
22 Jan 05 |  Business


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