When a frothy market bubbles into broken promises

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The Independent Online
Paul Salmon and his wife Chris sold their house in Chiswick, west London, "in good faith" to help speed a chain. Six months later they are living with friends, paying pounds 100 a week to keep their furniture in storage, and feel they have been "pushed out of the market" by gazumpers.

The Salmons had found the house they wanted, also in Chiswick. The vendor had agreed to sell at pounds 250,000, and so they sold their own as a sign of good faith to help "tidy up the chain" after placing it on the market last October.

The chain lingered on into the new year, and the price crept up by pounds 2,000, but Mr Salmon, a photographer, was unworried. "We couldn't see how it would fall through," he said. But unbeknown to the Salmons, however, the vendors' vendors, at the top of the chain, received a bid pounds 30,000 above the original offer.

"Our vendors couldn't afford to go the extra pounds 30,000 to match the other bid. We couldn't match pounds 25,000 to keep the chain intact as we'd already sold our house, so the chain collapsed," Mr Salmon said.

He is left with the bitter knowledge that his own home would have risen sharply in value in the six months since they sold it. "And we have nowhere to live."

According to Alicia Casingena, senior negotiator at Keith Cardale Groves estate agents in Belsize Park, north London, experiences such as the Salmons' - almost unheard of since the 1980s - have become increasingly common in the past year.

"People are getting gazumped here because we have a huge influx of foreign buyers, around 50 per cent, who are coming in with cash. The local buyers are on a budget ... and the foreign buyers are putting the money on the table. People don't care who they sell to if they're getting pounds 10,000-to- pounds 20,000 more," she said.

She welcomed the possibility of compensation for gazumped buyers. "You can't help but build up a rapport with a family and when they get gazumped it is upsetting. This proposal wouldn't change the market, but it would be a bit of compensation," Ms Casingena said.

The National Association of Estate Agents reports that up to 50,000 sales last year were affected by gazumping, about 5 per cent of all sales. The problem is worse in London and in the South- east where 10 per cent of sales is affected, but increasing levels of gazumping are also being reported in Birmingham and Manchester.

Lindsay Cuthill, a director of Savills in Fulham, said that there was "definitely room" for some sort of legislation, but added that vendors were not the only ones at fault when it came to pulling out of sales.

"When the market is as frothy as it is, all sides are out for what they can get," he said. "Very often purchasers float into your office. They think they'll make an offer ... Then they have to wait a week while their mum comes to look at it, they haven't got their mortgage organised. There are lots of reasons why the vendor shouldn't be completely tied in."

Fiona McIntosh, 26, was gazumped by pounds 10,000 despite agreeing that the vendor, a 67-year-old woman, could stay in the property until she found a new one. Her agreement had been verbal, as she had assumed that the woman would stand by her word.

Today, she says, she would not make the same mistake. "Today's society revolves around money, and nothing, however big a gesture of goodwill, is going to change that."

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