The return of 'gazundering' is good for the property market

If deluded sellers won't ask realistic prices for their houses, then buyers should force their hand, no matter how rude it may seem.

Every October the same thing happens: after their summer holidays, people come home full of optimism and put their houses on the market. And when they do so, says home search agent Henry Pryor, they put them on at prices around 3% higher than they would have at the beginning of the summer, regardless of the state of the market.

And that is exactly what has happened this year. The 105,769 properties, as we now call them, listed on last month, were priced on average at £7,000 (3.1%) more than those listed a month ago.

This, says Pryor, is clearly "crackers". Supply is rising fast across the market and demand is falling: on current trends a mere 9,000 of the 105,769 properties are likely to find a buyer, "leaving the other 92% wondering what to do next".

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The correct answer, of course, is to reduce the price something 30% of sellers ended up doing over the summer. But those who don't cut their prices might find that someone else does it for them. How? Gazundering.

The general consensus is that gazundering which is becoming pretty common practice in today's market is both rude and rather unpleasant. And it is true that it isn't polite, after weeks of planning and admin, to suddenly demand a lower price from a vendor.

But buyers aren't stupid: they know that this is their market and they are clearly going to use their power to get the price of the house they want down to where they consider the correct level to be. That matters, because if you only have one buyer, his idea of where the correct price should be is, in fact, the correct price.

So if a vendor won't cut his price at the start of a deal, should he really be surprised to be asked to cut it at the end? Right now "deluded sellers" are clogging up the housing market. If a spate of gazundering clears them out, is it really such a bad thing?

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.