Estate agents are reporting the highest levels of “gazumping” for a decade in prime areas of London as a drought of properties and bumper City bonuses fuel competition among buyers.
Douglas & Gordon, which runs 23 offices across London, said as many as one in three properties was attracting multiple offers, with about one in five buyers being gazumped.
Hamptons International, an agency with 70 UK offices, said gazumping – where a vendor rejects an accepted offer in favour of a higher price – was happening more in London now than at any time since the mid-1990s.
Top-end properties across the capital are going for 5-8 per cent more than the asking price, compared with discounts of up to 7 per cent of the asking price last year. Another agency, Savills, has also seen in recent weeks a jump in gazumping in south-east commuter belt properties.
Buyers in the final stages of purchasing a high-value property could lose up to £10,000 in legal fees and survey costs if a transaction falls through.
Demand for such properties has risen to exceptionally strong levels in recent weeks as City workers have been raking in record bonuses and there is renewed confidence in the housing market.
Hamptons is seeing 84 per cent more demand than at this time last year and says buyers are battling for 18 per cent fewer properties. The agency registered more than 2,000 new buyers in London last month.
Buyers are competing for properties worth at least £500,000 in exclusive areas of London, including Knightsbridge, Islington, Chelsea and Hampstead, as well as sought-after areas outside the capital, such as Cheltenham and Oxford.
The problem of gazumping is being compounded by unusually low levels of properties coming on to the market, as vendors last year delayed selling for fear of weakness in the market.
“The normal situation of having more buyers than sellers at this time of year has been massively exacerbated this time due to the negative publicity of property prices,” said Ed Mead, director at Douglas & Gordon.
The latest figures from Nationwide, the UK’s largest building society, showed annual house price growth of 4.4 per cent, but agencies say prices at the top end of the market have risen by as much as 15 per cent.