The government is moving to curb “gazundering”—the practice where buyers lower their agreed offer on a property just before contracts are exchanged—by introducing legally binding agreements. The Ministry for Housing, Communities and Local Government confirmed it intends to stop the practice by preventing buyers from walking away at the last minute without a valid reason, with associated fines for those who do.
The Mechanics of Gazundering
Gazundering occurs in the property market in England and Wales because an offer is not legally binding until contracts are formally exchanged. This leaves sellers in a precarious position, often forcing them to accept a lower price or risk the collapse of their entire property chain. If a chain breaks, a seller may lose the home they are in the process of purchasing and incur significant financial losses, including repeat legal fees and moving costs. According to the Ministry for Housing, Communities and Local Government, one in three house sales currently falls through before exchange. These failures cost sellers approximately £400m annually, with a wider impact on the economy estimated at £1.5bn. On average, it takes 120 days to complete a property transaction once an offer is accepted.
Market Pressures and Growing Concerns
Beth Rudolf of the Conveyancing Association describes gazundering as a small but growing problem. She notes that the practice is becoming more frequent due to shifts in the property market that have created a buyers' market.
With more houses listed than there are individuals looking to purchase, sellers face stiffer competition, which can lead to situations where buyers feel emboldened to renegotiate prices late in the process.
For many, the impact is deeply personal. One seller, who experienced a £15,000 price drop the day before she was set to exchange, described the experience as “awful,” noting that the uncertainty threatened the move to her family’s new home. While her buyers ultimately agreed to proceed at the original price after she put her house back on the market, the stress of the tactic remains a significant concern for those within the industry.
Proposed Reforms and Timeline
The government has outlined plans to reform the house buying and selling market in England and Wales to address these issues. In addition to tackling gazundering, the proposed reforms aim to cut the time it takes to complete a sale by four weeks and save the average first-time buyer approximately £650. However, the current timetable for these reforms is set for the end of the current parliament in 2029. The Conveyancing Association has expressed a desire for these measures to be implemented “without delay” rather than waiting for the 2029 deadline.
Practical Steps to Protect a Sale
While awaiting legislative change, the Conveyancing Association suggests several strategies to help sellers protect themselves against last-minute price cuts:
| Strategy | Description |
|---|---|
| Clear Communication | Inform your estate agent early that your finances do not allow for last-minute re-negotiation. |
| Advance Preparation | Instruct your lawyer to gather all necessary legal searches and property information as soon as the house is listed. |
| Reservation Agreements | Consider a fee-based agreement where a buyer reserves the right to purchase, with penalties if either party withdraws. |
| Conditional Offers | Agree to terms that allow for cancellation without penalty only if specific, pre-agreed conditions—such as a related sale—fail. |
