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Gazumping costs homeowners £300m annually

Wednesday, 19 September 2007 12:00 AM

Gazumping is costing homeowners nearly £300 million annually according to new research released today.

The costs of legal fees, surveys, home information packs and searches are all wasted when a sale is gazumped at the last hurdle, costing £290 million a year according to personal finance website Fool.co.uk.

With house prices increasing 9.6 per cent annually, according to Rightmove.co.uk, the market is becoming increasingly competitive.

As a result one in ten homeowners has been gazumped while trying to sell their property, according to Fool.co.uk.

Of these, 12 per cent have been gazumped three or more times during the sale of a property.

Despite this, the negative effects of gazumping a deal are not universally frowned upon.

As many as 22 per cent of buyers admit they would consider gazumping a purchase and a further 12 per cent think the process is a "necessary evil".

"For many people, the purchase of a house will probably be the biggest single acquisition they will ever make. It can take months of searching to find the ideal home and anything that dashes the dream can be emotionally draining, especially if it is the result of being gazumped," commented David Kuo, head of personal finance at Fool.co.uk.

"But it's not only emotions that get hurt when you are gazumped - finances can take a battering too. Consequently, it is important to minimise the chances of being gazumped, though it is not possible to eliminate the risk completely."

As many as 73 per cent of those questioned thought gazumping should be made illegal and one in ten were so put-off by being gazumped they decided to remain in their present property.

"It is sometimes said that gazumping is the price we pay for free market competition. But while competition can often draw out the best price for a product, it can also bring out the worst in people," concluded Mr Kuo.

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