Government plans to end gazumping

Government plans to end gazumping

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.

 

Today's Conveyancer

9 Comments

  • If you are a buyer maybe you don’t want your offer exceeded. However, if you are a seller, maybe you will want to achieve a higher price if you can get it. Will adoption of reservation agreements be taken up on a big enough scale to make a difference if they are made voluntary?

  • Gazumping is one of the causes of abortive sales. I have seen various annual national figures for the cost of this. Up to £800m plus

    This money is not only paid by someone but to someone

    Conveyancing has, since 1804, been limited by statute to certain professions which have not used their privileges to get rid of unacceptable practices such as gazumping and over-escalating ground rents. They have had enough time to make a real difference and must now lose their advantages.

    All groups etc seeking the benefit of future trading restrictions in the home moving market must only be awarded these for a limited time. On competition And,as a quid pro quo, commit to a menu of improvements. The global search industry would be well worth considering

    • How can solicitors stop gazumping ? Please explain . I have only been doing the job for 42 years so would be keen to know how .

      • Name and shame

        Make it a professional requirement that notice of previous gazumping and the potential loss to future buyers of repetition be made known in marketing etc

  • At the moment the government’s time would be better spent getting rid of the Ground 8 Housing Act 1988 issue.

    • Peter

      Once we get a government committed to reform, we can start picking our preferences

  • “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.”

    So their failure will be our fault? Splendid, business as usual then…

  • I love how this is being tabled by the government as a fix to a problem which doesnt happen as much as people realise.

    Why are they dodging the elephants in the room, 1. how long it takes to complete moving home, 2, the lack of transparency still in conveyancing fee’s, 3, the scale of which referral fee’s are paid to some agents, 4, how long it takes for some councils to return searches…

    instead, its a great diversion tactic again by those in the government to divert our attention away from the real issues.

    • I couldn’t agree more, this is a bullet dodging , yet to be underway, probably won’t go anywhere announcement. Surely a full list of ‘how to fix the property market’ would be too daunting so just take a stab at regurgitating what the government has failed numerous times on and throw the blame at the industry itself. Makes total sense to waste time and money on this bound to go absolutely no where distraction. Business as usual, indeed.

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