Is Gazanging really the main problem in the property market right now?
There has been much recent press hype about ‘Gazanging‘.
For those of you asking “What is Gazanging“, it is the term now established to describe when property sellers withdraw shortly before completion of the Conveyancing Process, even when the buyer is ready to go ahead!
Apparently many sellers, having perhaps waited months or even years to get a buyer, then discover that they cannot find a home to buy.
Having polled a number of Conveyancing Solicitors working at the ‘coal-face’ of the property market – most suggest that the real issue lies more with the generally weak state of the economy than Gazanging.
Recent Property Market data
The land registry has just published its house price index for August, compiled from details of completed property transactions submitted to the registry by Conveyancing Solicitors.
This shows the monthly change from July to August as a decrease of 0. 3 per cent and signals a return to the negative rates seen in May and June.
More alarmingly for the property market, the number of house sales which completed in June 2011 showed a drop of 13 per cent to just 54, 776, from 62, 714 in June 2010 (figures for England and Wales). Is this nadir really caused by the ‘Gazanging‘ phenomenon?
This is confirmed by a recent report from Nationwide, whose chief economist Robert Gardner said “Sluggish demand for homes on the back of weak labour market conditions, combined with only a gradual rise in the supply of available properties, has helped to keep property prices fairly stable since the summer of 2010. ”
While consumer confidence as tracked by Nationwide is already close to an all time low, another report from Santander earlier this week suggests that eight per cent of Londoners are thinking of buying a home in the next year, while across the country 25 per cent intend to buy in the next five years.
Of course, thinking about buying and actually going through with it are two different things, but this does seem to indicate that for very many people buying a home is still high on their list of priorities.
It would be interesting to know how many existing home-owners are thinking of selling in the next few years. It does seem that fewer properties are coming on the market, as many owners decide to stay put rather than face the prospect of a long wait to find a buyer.
Gazanging is a problem nonetheless
Gazanging can be a very real problem for buyers who have perhaps already spent money on survey and legal fees before the seller the refuses to exchange contracts.
It is difficult to see what can be done to stop this happening, any more than gazumping could be outlawed some years ago. The only way in which the housing market can improve would seem to come from an improvement in the availability of mortgages, especially for first-time buyers, and increased consumer confidence generally.