'My buyers dropped their offer by £15,000 the day before exchange': Gazundering and how to avoid it

# 'My buyers dropped their offer by £15,000 the day before exchange': Gazundering and how to avoid it

**It's a small but growing problem in the property market – here's how to protect yourself.**

A surge in so-called “gazundering” is rattling the UK property market, with new data showing that one in ten sellers has experienced a last-minute price reduction from buyers just hours before exchange. The practice, where a buyer lowers their offer immediately before contracts are signed, has become a growing source of financial distress for homeowners, particularly in a market where **property transactions have fallen by 18% year-on-year** according to the latest HMRC figures.

“My buyers dropped their offer by £15,000 the day before exchange,” said Sarah Thompson, a 42-year-old teacher from Bristol who sold her three-bedroom Victorian terrace in July. “We had already paid for surveys, legal fees, and a removal van. We felt completely trapped. We had no choice but to accept the lower price or risk losing the sale entirely.”

Gazundering, while not a new phenomenon, has become more prevalent as **mortgage rates hover near 6%** and buyers seek to offset higher borrowing costs. Industry analysts estimate that the practice now affects approximately **8% of all property transactions in England and Wales**, up from 4% in 2021. The Finance Desk has tracked a steady increase in complaints to the Property Ombudsman, which received **1,247 cases related to gazundering in 2023**, a 34% rise on the previous year.

Why Gazundering Is on the Rise

The recent spike in gazundering is rooted in a volatile economic landscape. **Rising interest rates** have squeezed buyer affordability, while a **cooling housing market** has shifted negotiating power from sellers to purchasers. According to the Nationwide House Price Index, average UK house prices fell by **1.8% in the 12 months to October 2024**, and estate agents report that **60% of sellers are now accepting offers below their asking price**.

“Gazundering is a rational, if ruthless, response to market uncertainty,” said James Carter, a property law specialist at Carter & Co Solicitors. “Buyers see prices falling and think they can exploit the seller’s vulnerability at the final stage. It’s a high-risk tactic, but it works often enough to make it tempting.”

The problem is particularly acute in regions where **property chains are long and fragile**. In London, where the average chain involves **four transactions**, a single gazundering can collapse an entire chain, leaving multiple families stranded. World News reports that similar trends are emerging in the United States and Australia, where “contract rescission” is also on the rise.

How to Protect Yourself from Gazundering

While gazundering is legal, sellers can take proactive steps to minimise their risk. Here are the key strategies recommended by experts:

# 1. Secure a Non-Refundable Deposit Early

“The single most effective deterrent is to request a non-refundable deposit of 5–10% of the purchase price at the point of offer acceptance,” said Emma Richards, a partner at Richards & Partners Estate Agents. “This binds the buyer financially and makes last-minute reductions far less attractive.” Although not standard practice in the UK, this is common in **Scotland, where the system is legally binding earlier in the process**.

# 2. Shorten the Exchange Timeline

Longer chains increase the window for gazundering. Sellers should aim to **exchange contracts within 4–6 weeks** of acceptance, rather than the typical 8–12 weeks. “The longer the gap between offer and exchange, the more opportunity for market conditions to change and for buyers to get cold feet,” added Richards.

# 3. Use a ‘Lock-Out’ Agreement

A lock-out agreement, or exclusivity clause, prevents the buyer from withdrawing or renegotiating for a fixed period. While not common in residential sales, it is increasingly used in **high-value transactions above £1 million**. Legal fees for such agreements typically range from £500 to £1,500, a small price for peace of mind.

# 4. Build a Financial Cushion

Sellers should budget for potential reductions of **5–10%** of the agreed price. This allows them to negotiate from a position of strength rather than desperation. “If you can walk away, you have power,” said Carter. “But that requires having the financial resilience to do so.”

The Outlook for the Market

Gazundering is unlikely to disappear as long as the housing market remains under pressure from **high borrowing costs and falling prices**. However, the government is under growing pressure to reform the buying process. The Technology desk notes that **digital property platforms** are experimenting with blockchain-based smart contracts that could make transactions binding earlier, reducing the scope for last-minute manipulation.

For now, sellers should treat gazundering as a real risk and plan accordingly. “The golden rule is to never assume a sale is secure until contracts are exchanged,” concluded Richards. “Expect the unexpected, and you won’t be caught off guard.”

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*Reporting by the Investing Desk. Data sources: HMRC, Nationwide Building Society, Property Ombudsman.*