Banning gazumping will not prevent bad behaviour from home buyer and sellers.
This is according to Jonathan Williams, a partner specialising in property law from Roythornes Solicitors.
The statement is in response to plans announced by Sajid Javid last year. With an aim to make the process of buying homes ‘cheaper, faster and less stressful, the Secretary of State for Communities and Local Government proposed a clamp down on the practice of ‘gazumping’.
However, Mr Williams states that simply outlawing practice will not stop buyers and sellers from behaving badly, stressing that it is a small problem in the grand scheme of things. Instead, he says, the problem is with the shortage of housing supply and the lack of consumer awareness around the conveyancing process.
His statement reads: ‘According to latest statistics 200,000 transactions collapse each year, leaving would-be buyers with bills for surveys and legal fees to pay for the dream homes they have lost. Yes, it’s true that people do sometimes lose money during the selling and buying process, but it’s only a small problem when we consider the much bigger picture – in over thirty years as a conveyancing solicitor I have not seen a huge amount of abortive transactions.
‘We need to remember that people move house for all sorts of reasons – some planned, some not. A seller’s first port of call is an estate agent, not a solicitor, so invariably the house will not be ‘oven ready’ when it goes on the market.
‘Anyone can set themselves up as an estate agent. Unless the seller has appointed qualified surveyors or land agents, there is always a chance that the estate agent will not have noticed defects in the title deeds or the absence of essential paperwork needed to make a successful sale.
‘Conveyancing transactions are not just plagued by a lack of preparation, but also by offers taken from people who do not have the means to buy. Until a mortgage offer is issued there is bound to be uncertainty.
‘A chain only moves at the pace of its slowest link. It’s like joining a train heading for one destination; people board at different stations, all to arrive at the same time. But with conveyancing some people might lose patience with the process, get tripped up or be unable to raise a mortgage, so they will get off the train early.
‘It is said that Scotland’s system of sealed bids promotes early commitment but I suspect this also means that any issues are discovered later, with parties then left to look for reasons to back out. At least our system, although not perfect, allows us to address any problems first and then commit.
‘The Council of Mortgage Lenders’ handbook runs to many pages, and includes the basic requirements for every mortgage, plus the individual points lawyers must satisfy before a home loan can be completed. Conveyancing has become more onerous and time-consuming, with the risk management required for lawyers, buyers, sellers and mortgagees adding further expense. In my view, it’s not worth the Government banning gazumping to try and fix a system which although not ideal is not broken either. The fact is that moving home and getting the best price for our properties are highly emotive issues, and will remain so regardless of the rules around one annoying practice. Why not instead educate potential buyers and sellers on better preparation and seeking good and informed counsel.’
