The Government has announced that plans to end gazumping are firmly on the table through the possible introduction of voluntary reservation agreements, which should go ahead in 2022.
Despite previous efforts, backed by ministers, to introduce gazumping agreements in 2019, ministers have now announced that the efficacy of agreements will be reviewed throughout 2022.
As part of a planned pilot in 2020 to assess how the agreements could work, the Home Buying and Selling Group had agreed standard wording for reservation agreements to be used, but the pilot stalled and has been inactive since.
Housing Minister, Chris Pincher, recently revived the debate on reservation agreements however in a parliamentary discussion with MP Dan Carden after the Government was questioned again on its plans to end gazumping.
Pincher responded saying that the Government wants to stamp out the practice of gazumping and that preventing gazumping is part of the Government’s overall plan to improve the home buying and selling process.
Commenting on the agreements, Pincher said:
“To mitigate this risk, we have been exploring the adoption of voluntary reservation agreements.
Buyers and sellers would make a legal commitment to proceed with the sale once an offer has been accepted and may include a financial commitment which would be surrendered to the other side if the party withdraws without good reason such as gazumping.
Following behavioural insight research, work is now continuing to develop the agreements to make them an effective tool in improving the efficiency of home buying and selling.”
But, said Pincher, the success of the reservation agreement scheme will wholly depend on buy-in from the industry and will rely on the promotion of agreements by estate agents and conveyancers to make them an attractive proposition to clients in the home buying and selling process.