Homebuyers in the UK are falling victim to a phenomenon known as 'ghost gazumping', where sellers demand tens of thousands of pounds extra just before contracts are exchanged, citing rising house prices.
Unlike traditional gazumping, where a higher offer from another buyer is accepted, ghost gazumping involves the seller unilaterally raising the price without another buyer waiting. This practice has become increasingly common in property hotspots like London, where annual house price inflation exceeds 20%.
Lucy Franklin, a primary school teacher from South East London, experienced ghost gazumping twice in 18 months. In early 2013, her offer of £170,000 on a one-bedroom flat in Lewisham was accepted, but six months later, the seller demanded an extra £30,000. Unable to pay, the couple pulled out.
They found another flat later that year, bidding £5,000 over the £175,000 asking price. In December 2013, their offer was accepted. However, in March 2014, days before exchange, the seller demanded an additional £40,000, claiming the flat's value had risen. The couple could not raise the funds, and the flat was remarketed at the higher price.
In England and Wales, property sales are not legally binding until contracts are exchanged, leaving buyers vulnerable. Experts advise buyers to have finances and legal representation ready, and to maintain good relations with estate agents and vendors to reduce the risk of ghost gazumping.
