Homebuyers Reduce Offers by £15,000 Before Exchange, Prompting Calls for Property Reform
A growing number of property transactions in the UK are being jeopardised by 'gazundering', a practice where buyers reduce their offer just before contracts are exchanged. Sellers, often under immense pressure to complete, are then forced to accept a lower price or risk the entire sale collapsing.
This aggressive negotiation tactic is facilitated by the protracted and non-binding nature of the current English and Welsh property system. Unlike in Scotland, where offers become legally binding much earlier, the period between an offer being accepted and the exchange of contracts in England and Wales can stretch for months. During this time, either party can withdraw without penalty, creating an environment ripe for exploitation.
One homeowner, due to exchange contracts on their property, faced a £15,000 reduction in the buyer's offer at the last minute. This left them with the unenviable choice of accepting the lower price or losing their onward purchase. Such incidents underscore the inherent instability for sellers navigating the market, particularly when chains are involved.
Whilst current regulations offer little recourse for sellers against gazundering, legal professionals suggest certain preventative measures. Insisting on a shorter exchange timeframe, requesting a larger deposit to demonstrate commitment, or even exploring 'reservation agreements' — though not widely adopted — could provide some protection. However, systemic change to make offers binding earlier in the process is frequently cited as the most effective solution to curb this exploitative practice and provide greater security for all parties involved in property transactions.
