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FOMO is behind the gazumping trend in lettings

over 2 years ago
FOMO is behind the gazumping trend in lettings

The post-lockdown lettings market is super-buoyant and the fear of missing out (FOMO) is bringing a new competitive edge to renting. While making an offer £50 or £100  below the asking rent was acceptable – and often accepted by the landlord – in the past, today’s sought-after rentals can end up the subject of biddings wars, with gazumping a tactic back on the table.

If rental gazumping is a new concept to you and you’d like to avoid being pipped to the post at the very last minute, here’s our guide. 

What is gazumping?

Gazumping is when a tenant makes a last-minute offer on a rental property. Their offer will be higher than the one accepted by the landlord and it will come very late in the marketing process – perhaps after the referencing process has started or just before the tenancy agreement is signed. 

Why is gazumping starting to happen in lettings?

Gazumping is common when there is a supply and demand imbalance. In terms of today’s rental market, demand among tenants is increasing and the number of properties available to rent is falling. 

In fact, recent analysis by Zoopla revealed the number of tenants searching for rental properties at the start of 2022 was 76% higher than when compared to the same period between 2018 and 2021. The portal also found there were 39% fewer homes available to rent in January 2022 when compared to the same month in other years.

Is gazumping illegal?

Gazumping to secure a rental property is not illegal but it is widely viewed as slightly unethical. The legal aspect of lettings relates to a written tenancy agreement. This becomes a legally binding contract as soon as both the tenant and landlord have signed it. Until this point, there is nothing stopping multiple ascending offers being made on a property.

Will the highest offer always be chosen?

Not always, especially in lettings. A satisfactory referencing process is equally as important as the highest offer. Landlords will be looking for tenants who have a secure job, a good credit history, impeccable past landlord and employment references, and a track record that shows they pay the rent on time every month. Aspects such as how quickly the tenant can move in and whether they have any special conditions will also be weighed up against the offer made. 

How can gazumping be avoided?

Of course, matching (or exceeding) the asking rent will always turn the head of a landlord but there’s more to it than money. For tenants, speed is of the essence and it’s often too late to make a winning offer by the time a property is listed online. Registering directly with a letting agent ensures tenants hear about a property before the masses. Those who can view, offer and sign a tenancy agreement without delay – perhaps even within a 24 hour period – will be in pole position. Offering to pay six months’ rent upfront is another gesture that is finding favour, especially if there is any question mark over a renter’s financial health.

We are working to match the very best tenants with available properties, balancing offers, personal circumstances and the ability to be a reliable renter. Talk to us about properties to let and our landlord services.

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