Gazumping occurs when a buyer has had an offer to purchase a property accepted by the seller, but before the sale is exchanged the seller accepts another offer from another buyer. This is something that our team at INHOUS has experienced first-hand and on numerous occasions in the past few months, particularly across the Prime Central London market.
As unjust as it may feel when you are on the receiving end, the truth is that gazumping is a perfectly legal aspect of the property-buying process in England and Wales.
The reason for this is that an agreement to buy or sell a property does not become legally binding until written contracts are exchanged, which can come several weeks after an offer has been accepted. Strictly speaking, a buyer can be gazumped if the seller decides to reject their offer in favour of another buyer’s for any reason, such as delays in conveyancing or financial arrangements, not simply for a higher bid.
Instances of gazumping have been few and far between for the past five years. However, a shortage of housing stock in the Prime Central London market and the emergence of more competitive prices has ignited a very real trend in gazumping.
Other key factors fuelling this rise include the readjustment of housing prices and a desire to purchase property again. For example, fewer transactions are taking place in Super Prime Central London but at more realistic prices, which means people are starting to seriously consider property again – particularly before the UK leaves the EU later this year.
Simultaneously however, agents are currently under incredible pressure because there are still so few properties on the market and this leads to the overvaluing of property by 15 to 20 per cent. This makes it hard for a vendor to accept an offer when it comes in at market value because they are frequently misled by their agent.
Our advice to buyers is to compile a substantially written argument when submitting an offer on a property, instead of a verbal offer. The written offer should include proof of funds and be drafted by solicitors or with a financial broker’s details to verify that the offer is reliable.
Building a trustworthy case makes it very hard for vendors not to take an offer seriously so we recommend buyers to prepare comparable evidence for their agent to share in full. We also strongly suggest offering a quick exchange period, preferably five working days. A speedy transaction is exactly what a vendor is looking for in this current climate so having all the facts in one place is extremely attractive and much harder to turn down.
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Tenancy charges may vary, depending on the agreement we have with you, so it’s best to ask the INHOUS lettings department.
The following payments may apply when entering an Assured Shorthold Tenancy:
| First month’s rent | In advance |
| Tenancy Deposit | 5 weeks, or 6 weeks if annual rent is over £50,000 |
| Holding Deposit | One week’s rent, put towards your first rent due |
| Early termination when requested by the tenant | A charge not exceeding the financial loss experienced by the landlord |
| Default charge for late payment of rent | A maximum of 3% above Bank of England base rate, charged when rent is more than 14 days late |
| Default charge for replacement of lost key or security device | Equivalent to cost incurred |
| Changing the tenancy documents after the commencement of the tenancy, including change of sharer | £50 incl. VAT |
The following payments may apply when entering a Non-Housing Act Tenancy:
A Non-Housing Act Tenancy is formed when the annual rent exceeds £100,000 or the property is occupied by a Company rather that an individual.
| Inclusive of VAT | |
| Tenancy Setup Fee drafting and execution of tenancy agreement if supplied by us, collecting and holding the Security Deposit as Stakeholder, issuing protection certificates, if applicable, Open Banking type referencing of tenant and initial Right to Rent Checks | £360 |
| Check-in Fee checking into the property and reviewing inventory | minimum of £130 |
| Tenancy Continuation negotiating and drafting an extension | £150 |
| Change of Sharer – Deed of Assignment | £120 |
| Early Termination – Deed of Surrender | £120 |
| Guarantor Referencing Fee (each): | £30 |
| Deed of Guarantee Fee: | £50 |
| Late payment of rent | 3% above the Bank of England base rate |
This guide is for tenants and landlords in the private rented sector to help them understand their rights and responsibilities. This guide includes a checklist and further detail on each stage of the rental process.
Tenancy charges may vary, depending on the agreement we have with you, so it’s best to ask the INHOUS lettings department for a full breakdown of costs. Here’s a list of what you can typically expect to pay:
| Lettings Service Only: | 10%+VAT (12% inc. VAT) – Including rent collection |
| Letting and Management Service: | 16%+VAT (19.2% inc. VAT) |
| Short Let (less than 6 months): | 24%+VAT (28.8% inc. VAT) |
| Lettings Renewals Service: | 8%+VAT (9.6% inc. VAT) |
| Lettings and Management Renewal: | 14%+VAT (16.8% inc. VAT) |
| Short Let Renewal (less than 6 months): | 24%+VAT (28.8% inc. VAT) |
Additional non-optional fees and charges
We will not be charging clients fees for referencing, tenancy agreements or deposit registration.
The costs of a clean, EPC, gas safety, EICR, PAT and inventory are set by third party suppliers and prices may vary. The below schedule is to give you an idea of what you would typically pay.
All fees stated are inclusive of VAT (calculated at 20%):
During the tenancy (if required
INHOUS is a member of and covered by the ARLA/Propertymark Client Money Protection (CMP) Scheme.
We are also a member of a redress scheme provided by The Property Ombudsman www.tpos.co.uk.