Today it means: To swindle by making an offer on a property under the false pretense of good faith but then reducing the offer (normally just before contracts are exchanged), knowing that the threat of collapsing the property chain is likely to force the seller into accepting the amount of loss that they were cheated out of. Full definition →
Because it "goes under" the bed. Correct - particularly colloquial in north of England - refers to pot for night soil which was kept under the bed, as toilets were outside (or even down the street).
Etymology from Wiktionary, CC BY-SA 4.0.