House buyers drive hard bargain using new ‘bid and chip’ strategy
Gazumping has been replaced by “bid and chip” as the latest tactic in the property market, as buyers try to exploit nervousness among sellers after the Northern Rock affair.
“Bid and chip” – not to be confused with chip and pin involves prospective purchasers of swish Central London mansions making a successful bid and then, as the exchange of contracts draws close, chipping away at the price to get a reduction. Their aim is to work on the fears of sellers of such homes after the havoc wreaked on the financial markets by the Northern Rock debacle. The “bid and chip” trend has come to light as new figures show record numbers of seven-figure homes nationwide, with 88,000 properties now worth £1 million or more, according to Halifax. There were 6,170 sales of £1 million-plus homes in the year to June, a threefold increase over the past five years, the mortgage lender says. The “bid and chip” strategy could secure a bargain, but anyone trying the tactic has to be sure that there are no disappointed rivals waiting in the wings. If a party from overseas, rather than a City director, has his eyes on the place, the would-be “chipper” may be out of luck. Peter Wetherell of Wetherell, an estate agency that specialises in Mayfair homes, explains: “The buyers try to knock you down in price, but you then turn to another bidder who was also after the property. The original buyers then find that they are able to pay up after all.”
Hot properties - A third of postcode districts had £1 million-plus sales in the past year, but 5 per cent of all postcodes account for 70 per cent of all £1 million-plus sales - SW3 in Chelsea had the most sales of million-pound properties (200). This was closely followed by SW7 in Kensington (196) and W8 in Kensington (196). SW6 in Fulham had the third highest number of sales (166) - Outside
Source: The Times, 24/09/2007