The government wants to outlaw gazumping and gazundering in England. The instinct is right, but the detail matters far more than the headline.
Both practices are currently legal. Both cost buyers and sellers billions in abortive fees every single year, according to Trevor Abrahmsohn, founder and director of Glentree International, writing in Property Industry Eye.
What Gazumping and Gazundering Actually Cost
Gazumping is when a seller accepts an offer and then accepts a higher offer from a new buyer before exchange. Gazundering is when a buyer drops their offer at the last moment, citing spurious reasons. Both sit at the heart of what makes English property transactions so fragile.
Unlike Scotland's "missives" system - where a deal becomes legally binding once concluded - or the US escrow model, England offers what Abrahmsohn calls "the great holy trinity of property escape clauses": survey concerns, finance problems, and cold feet. Any combination can kill a deal with no financial penalty to the party walking away.
The numbers illustrate the damage. A single gazump of £50,000 on a sale price, a £30,000 last-minute reduction, or £5,000 in wasted buyer costs on a collapsed deal are not rare outliers. Multiply those figures across tens of thousands of transactions annually and the aggregate waste runs to billions, per Property Industry Eye.
For investors with active deal pipelines, the exposure is direct: survey fees, mortgage valuation costs, and solicitor time are all sunk before exchange. A collapsed deal at day 90 means starting again from zero.
Why Simply Banning It May Not Work
The government's proposed approach - modelled loosely on Scottish and American frameworks - risks outlawing the behaviour while creating space for more sophisticated versions of the same thing.
If deals become contractually binding earlier, the "great holy trinity" still exists. Buyers and sellers who want to exit will engineer exits. A legitimate survey finding becomes a pretext. A lender's revised valuation becomes a pretext. The result is the same financial loss wrapped in plausibly deniable paperwork.
Abrahmsohn draws a direct parallel with the Renters Rights Bill, which he argues drove buy-to-let landlords out of the market rather than protecting tenants - applying Newton's third law to housing policy: every action is met by an equal and opposite reaction.
The underlying picture here is not unique to gazumping reform. Poorly designed regulation that targets symptoms rather than incentives tends to shift, not solve, the problem.
What a Better System Looks Like
The more targeted fix, per Abrahmsohn's three-decade practice at Glentree International, is a simple accountability mechanism: whichever party pulls out without proper cause pays the other side's abortive costs.
This is standard practice in commercial property. A seller's solicitor prepares a fully researched sales pack before listing. Both parties then agree a fixed "fidelity period" giving the buyer exclusive purchase rights. If the buyer exits without cause during that window, they cover the vendor's abortive costs. If the seller exits, the same applies in reverse.
The third element - "legitimising gazumping" via sealed bids with a fixed deadline - removes the incentive to gazump after acceptance. Best offer wins transparently, rather than quietly, after the original buyer has spent money.
For investors building a property strategy, this model is replicable now without waiting for legislation. Negotiating an exclusivity period at offer stage - even informally - reduces exposure materially. Use Property Filter's free calculators to model deal viability before committing to survey and legal spend.
Key takeaways
Both gazumping and gazundering are currently legal in England; the government has proposed reforms to change this.
Abortive costs from collapsed deals run to billions annually across the market, per Property Industry Eye.
Simply banning the practices without a "polluter pays" mechanism risks shifting the problem rather than solving it.
Scotland's missives system and the US escrow model both make deals binding earlier, but England's three legal escape clauses (survey, finance, cold feet) still apply under any reform.
A fixed fidelity period plus abortive cost liability is already used in commercial property and available to residential investors now, without legislation.
