Gazundering could signal housing market cool-off
Nov 28, 2006
The growing prevalence of the process known as 'gazundering' suggests that the housing market could be cooling off, said mortgage company Firstrung.
Gazundering is when a prospective buyer reduces the price that they have offered for a property just before the contracts are exchanged, and is effectively prevented by legislation in Scotland, but not in the rest of the UK.
A recent survey from Yorkshire Bank found that one-third of first-time buyers, many of whom are overburdened with mortgage payments, were now prepared to consider the practice when making an offer.
The chief executive of Firstrung said that if gazundering was returning, it would suggest that the property market must be becoming a buyer's market, as people could not get away with it in a seller's market. He said that in a seller's market, a seller could simply wait for the next buyer to come along if the first one did not want to pay the price. For anyone to have the confidence to gazunder, they must be nervous buyers and be very nervous about the market, he added.
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