How common is gazumping and is there anything investors can do to avoid it?

Gazumping continues to be a prevalent issue in the current market. One that can derail many investment plans, and end up costing borrowers thousands. Given how challenging the economy is, investors are likely (rightly) wondering how common is gazumping, or even how often does gazumping happen to a single person.

No one wants to lose money unnecessarily. Fortunately, it is possible to avoid being gazumped. Even in a competitive market.

This blog will break down everything investors need to know about gazumping. We will explore just how common is gazumping, why it’s so stubbornly widespread, and how specialist finance can help borrowers avoid disaster.

What is gazumping?

First – a refresh. What exactly is gazumping? Gazumping occurs where the seller of a property agrees to a deal with a buyer, but then accepts a higher offer before the original sale completes.

The initial buyer will be gazumped by a rival bidder. Often, gazumping takes place late in the process, as buyers swoop in at the last minute with a tempting offer.

The practice tends to be seen more in a sellers’ market. Where prices are high, demand will be too. This gives sellers the upper hand, as there will be no shortage of buyers.

In a buyers’ market, gazundering may be more prevalent. This is where a buyer lowers their offer just before the exchange of contracts in order to get a better deal. The seller will have been gazundered.

How common is gazumping?

Gazumping affects a sizable portion of the public. We’ve been monitoring gazumping trends in the market since 2016 and not only do our results show that the chances of being gazumped are high, but that the practice is spreading.

Our first gazumping report from 2016[1] showed that roughly 2.57 million British adults lost out on a property purchase, despite having an offer accepted, because another buyer came in at the last minute with a more attractive offer.

Follow up research in 2019[2] revealed that 31% of UK homeowners had previously lost out on a property as a result of being gazumped in the prior decade. The same figure was recorded in 2022[3].

But, our most recent gazumping report found that 37% of homebuyers since 2014 have been gazumped at least once. This is a jump of 6% between 2022 and 2024. What’s more, the results showed gazumping is now a UK-wide issue.

Prior surveys revealed that gazumping was widespread in London and the South East, reflecting how competitive this corner of the market is. But, in 2024, just over half (53%) of buyers in Greater London said they were gazumped by a rival bidder, down from 62% in 2022.

In fact, the West Midlands had the highest proportion of gazumped buyers, just ahead of London. Across most of England and Wales, gazumping rates rose between 2022 and 2024. Some of the biggest jumps happened in the West Midlands (32% in 2022, 53% in 2024), and the North West (27% to 43%).

Why is it not illegal?

Given how common gazumping is, many will likely be wondering why the practice hasn’t been outlawed. While gazumping is illegal in Scotland, it can still be done in England and Wales.

As it stands, until a contract is signed, there is no official legal agreement between a borrower and a seller to transfer the ownership of the home. Until a contract is signed, sellers are free to accept a bid from anyone, at any time[4].

Buyers and borrowers want this changed. The majority of our respondents (78%) said they wanted banning laws introduced. In certain regions, the percentages are even higher. In the North West, 87% want the practice banned, as do 82% in the South East, 82% in the East Midlands, and 81% in Wales.

Fortunately, we may see some progress in this area over the coming months and years. Recently, the Levelling Up Committee launched an inquiry on improving the home buying and selling process[5].

Within this inquiry, the Committee will be examining issues in the transaction process, including gazumping or gazundering, and how could they be remedied. It’s early days, but it could be the first step to getting gazumping outlawed in England and Wales.

The role specialised finance plays for the gazumped

Until we reach the point where gazumping is potentially outlawed, buyers and investors will need to what they can to avoid it. Fortunately, bridging finance can help here.

Our 2024 report also found that the circumstances in which buyers find themselves gazumped can all be aided by bespoke lending. Just over half (54%) of gazumped respondents were gazumped because they got stuck in a long property chain and it took too long to complete the purchase. Meanwhile, 58% were gazumped while waiting to find a seller for a property they owned, and 59% were gazumped, at least in part, because of delays or long waiting times in getting a mortgage.

These are all issued that bridging finance and/or specialist BTL mortgages can help with. Our bridging loans, for example, can be issued in as little as three days where everything is accounted for. This minimises the chances of being gazumped.

Also, where a deal is at risk of falling through due to complicated property chains, our funding can be used to secure an asset while solutions are found. Across all our products, we’ll tailor our loans to fit the borrower’s requirements.

So, while our clients may worry about how common is gazumping, they don’t need to fear that it’s inevitable. We understand the risk gazumping poses. We’ll act accordingly.