Key facts
- Gazundering is when a buyer lowers their agreed offer just before contracts are exchanged.
- This practice is becoming more common in the property market in England and Wales.
- Sellers are pressured to accept lower offers or risk losing their sale and incurring costs.
- Offers in England, Wales, and Northern Ireland are not legally binding until contracts are exchanged.
- Government reforms are planned to introduce legally binding agreements and fines for last-minute renegotiations.
Gazundering, a practice where buyers reduce their agreed offer just before contracts are exchanged, is increasingly affecting individuals in the property market in England and Wales. This tactic leverages the fact that property sales are not legally binding until contracts are exchanged, putting sellers under immense pressure to accept a lower price to avoid losing their sale and incurring significant costs, such as legal fees and removal expenses.
One seller, identified as Sarah, recounted how her buyers dropped their offer by £15,000 the day before exchange, forcing her to consider the financial implications of either accepting the reduced price or losing the sale and potentially her onward purchase. The Conveyancing Association has highlighted gazundering as a growing problem, particularly as the market has cooled, shifting power to buyers. They are urging the government to expedite reforms aimed at tackling such issues.
The government has acknowledged the problem and plans to introduce reforms that would make agreements legally binding and impose fines on buyers who withdraw without a valid reason. These reforms are intended to reduce the time taken to complete sales and save buyers money. Currently, the timetable for these changes is set for 2029, but there is a call for them to be implemented sooner.