Personal finance: The going gets tough for gazumpers

Losing a house last minute to a higher bidder is a heart-breaking experience - and one the Government is keen to eradicate.

"I DIDN'T have his phone number, so I turned up with both children crying on his doorstep," says Christine Edmans. An extract from a novel about a woman scorned? No, just a tale of one desperate purchaser's attempts to track down a vendor who had succumbed to that pernicious practice, gazumping.

Last week the Government announced measures to curb both gazumping and the historic rule, caveat emptor - let the buyer beware - but for Ms Edmans the moves come too late. Desperation prompted her journey from London to Colchester, Essex, where she begged the vendor to honour his acceptance of her offer on a three-bedroom 1930s house in south London.

Ms Edmans was particularly anxious to complete having previously lost a purchase to a gazumper. On principle she had refused to match the higher offer and, unable to further stall the sale of her flat, moved temporarily into expensive rented accommodation and put her furniture into storage.

The legal process was smooth until the agent's fateful call: "He said that a barrister was interested in the property despite having been told it was no longer for sale. He threatened to make life hell until they relented and let him view." The bumptious barrister subsequently made an offer which Ms Edmans matched, by now her principles "having flown out of the window". His next bid, pounds 15,000 more, which she could not equal, led to her hunt for the out-of-town vendor.

An eventual confrontation confirmed Ms Edmans' fears: "He was shocked to see a snivelling woman on his doorstep but said pounds 15,000 was too much to refuse." Dejected, she returned to London to house-hunt for a third time, but the experience took its toll: "I was very, very depressed having lost pounds 2,000 in legal fees and with rent and furniture storage costing thousands more."

Last year, Hilary Armstrong, the Housing Minister, commissioned a study examining 1,200 sales and purchases in England and Wales and a further sample in Scotland. The study confirmed the British system of housebuying as the cheapest but slowest of 10 countries surveyed, a practice which results in frustration and stress for vendors and buyers. The latest proposals include making house sellers responsible for surveys and searches which the Government hopes will speed up the process and minimise opportunity for gazumping.

The Government says it cannot tackle gazumping directly because sellers will always find ways of accepting higher offers - but some experts perceive flaws in the recent recommendations. A National Consumer Council spokesperson cautions: "We would like to see a pilot scheme to assess practical hitches before it goes nation-wide. After all, will buyers trust surveys produced by vendors?"

Other critics argue that this new system will be costly for vendors and these costs will be passed on to purchasers, in particular first-time buyers and those at the bottom end of the market.

Simon Tyler of Chase de Vere Mortgages believes surveyors will be more cautious as a result of the plans. He also believes quickening the buying process could result in hasty decisions with negative financial implications and that a reasonable time period lets most buyers make the complex arrangements associated with moving.

Buyers unable to wait for Government initiatives to take effect can now take matters into their own hands and partially protect themselves against the financial implications of gazumping. For a one-off fee of pounds 30, Lambeth Building Society offers an insurance policy which gives cover of up to pounds 300 for wasted legal and survey fees. Legal & General offers a similar policy, aimed at helping both the victims of gazumpers and gazunderers, where prospective buyers pull out at the last minute.

Sadly, Ms Edmans was gazumped a third time before finally succeeding, on her fourth attempt, in buying a three-bedroom house in Dulwich. She welcomes moves to ensure other buyers avoid similar torment but would rather see legislative redress: "People are greedy, it's human nature, but vendors should be bound to accept offers and face financial penalties if they renege."

National Consumer Council: 0171 730 3469; National Association of Estate Agents: 01926 496 800; Lambeth Building Society: 0171 928 1331