I thought I would make this the subject of my Monday tenants feature as I have come across this twice very recently.
The first time , it was the subject of one of my Q&A answers which you can see here. In this case the tenants thought that they were going to be moving into a property in four days, and had already paid over their deposit, only to be told that the property was being withdrawn from the market. Later they learn that the property is being re-let at a higher rent with another agency.
Then I read Jo Thornhill writing in the Daily Mail reporting that, with rents going up, tenants need to beware not only losing the property, but losing their holding deposit as well! To quote the article:
Sam Baden, property analyst at website findaproperty.com, fears that this trend is on the rise. She says one in eight property hunters has experienced gazumping in the past year. ‘Lack of mortgage funding and high house prices are locking many people out of buying,’ she says.
‘The knock-on effect is that rental demand has soared, with prices rising rapidly. in the past it was rare for gazumping to happen in the rental market, but in this sort of environment it is going to occur more.’
Once a tenancy agreement is signed, the document is legally binding. But until that moment it is possible for a landlord to accept a higher offer. and agents are obliged to pass on all enquiries and offers to the landlord.
So the message to tenants is to be particularly careful about the landlords and agents they visit. Regulated agents such as those who belong to ARLA of RICS or NALS are less likley to do this sort of thing.
Although if they are ordered by their client the landlord to withdraw the property from the market before the tenancy agreement is signed, they may have little choice.
And this is the market where the government expects landlords to reduce their rent to levels which will be affordable to Housing Benefit tenants!