Sarah was excitedly packing up to move out of the terraced house her family had outgrown when her phone rang. It was her estate agent, sounding "befuddled". He had bad news: the buyers of her house, just a day before contracts were due to be exchanged, had dropped their offer by £15,000. "It was awful, your heart just drops to your stomach," says Sarah, not her real name.
She had fallen victim to gazundering – a rare but growing problem in the property market in England and Wales, according to the Conveyancing Association. It is calling for government reforms aimed at tackling this and other house buying and selling issues to be brought in "without delay" instead of 2029 as planned.
“Buyers slashed their offer by £15,000 a day before exchange, leaving seller Sarah devastated by gazundering.”
For Sarah, her husband and two children, the move had been going smoothly. They were selling the three-bedroom terrace they had renovated and buying her parents' four-bedroom detached house in the countryside. But the day before exchange, the buyers said they had done more research about the area and would now offer £15,000 less than the price they had agreed.
"I can't even begin to go through the financial consequences [if we lost the sale]," she says. If they accepted the lower offer, they would be out of pocket; if they refused, there would be costs too. "We had already paid one set of legal fees but would have had to pay again if we needed a new buyer. We'd also paid the removal fees already and would have to pay again if we cancelled the moving date."
Gazundering puts a seller under pressure to accept the lower price or risk losing their sale and collapsing their property chain – potentially losing the house they want to buy. It is possible because in England, Wales and Northern Ireland an offer is not legally binding until parties exchange contracts. Once an offer is accepted, it takes an average of 120 days to complete, and one in three house sales fall through before exchange. This costs sellers £400m and the wider economy £1.5bn each year, according to the Ministry for Housing, Communities and Local Government. Planned government reforms would cut that time by four weeks and save the average first time buyer £650, it says.
After speaking to her dad and husband, Sarah decided to put her house back on the market that same day. The next day, her buyers "went running into the estate agent's office saying they were happy to proceed with the agreed sale price", she says. But the experience left her shaken. "Gazundering is actually awful. It's not just a business deal. It's my children's home and the fact that nothing's been done about it is ridiculous."
The Conveyancing Association, which represents conveyancers, has warned that without reform, more families like Sarah's will face the same ordeal. Its director Beth Rudolf, speaking on BBC Radio 4's Money Box, said the problem is…
