A survey of over 2000 UK adults uncovers that 55% of people view gazumping restrictions as their top priority in new housing reforms.
These numbers increased to 64% of people surveyed that currently owned residential property and had been through the house buying process.
The practice of placing an increased offer on a property, when a deal is close to completion, should have serious caps and restrictions according to 52% of people surveyed.
Sajid Javid, former communities secretary, commented: “We want to help everyone have a good quality home they can afford, and improving the process of buying and selling is part of delivering that. Buying a home is one of life’s largest investments so, if it goes wrong, it can be costly. That’s why we’re determined to make the process cheaper, faster and less stressful.”
Currently, estate agents are legally obliged to pass on every offer in writing, regardless of the stage of completion, under the Estate Agents Act 1979. Legally, every offer must be given to the seller and they are within their rights to accept a new offer if they choose.
Gazumping is a hugely influential factor for property chains collapsing. The report illustrates that 39% of people surveyed have been effected by property deals falling through because the seller has accepted an increased offer from another buyer.
Paresh Raja, chief executive officer of MFS said: “The research findings clearly demonstrate the public’s desire to have new laws introduced to prevent gazumping, and in turn, reduce the risk of a property chain collapsing.
‘There’s no denying the myriad of issues facing the new Housing Minister and as such, MFS’ research provides timely and much needed insight into the key concerns of people from different segments of the property market.”
This is an issue the government have been considering since last October when they released their research paper on Buying and Selling Homes (BIS/283).
The survey highlighted the stress felt by both seller and buyer because of insecurities surrounding a collapse in the deal. However, when participants were asked how they felt about sellers and buyers entering a legal commitment or ‘lock-in’ agreement early on in the buying process, sellers were more enthusiastic with 70% willing compared with 50% of buyers. Possibly indicating, in spite of concerns, that both parties prefer the freedom and ease of changing their mind.
Although the government are considering reforming the house buying process, the 3% of British adults that have lost out on property, due to last minute gazumpers, continue to feel stressed and annoyed. Especially when money spent on fees to intermediaries is a combined loss of £4.4 billion!
Have your home-buyers been affected by gazumping? Would a ‘lock-in’ clause eradicate the stress felt by both seller and buyer?