Gazumping to become a thing of the past? Here we go again!
Yes, it seems the government are in the mood to have yet another crack at “modernising” the Conveyancing process by making it illegal to withdraw from a house purchase once an offer has been formally accepted.
Those of us with fairly good memories will remember the last time that the government tried to do something similar when they introduced the HIP (or home information pack) about 10 years ago.
This over complicated process required every vendor to have a HIP prepared ready to present to potential purchasers which was supposed to include an array of documents such as local authority searches, energy performance certificates and even surveys. The idea was that with all this to hand, purchasers would be able to make more informed decisions, enter firm binding offers and all in the house buying world would be hunky dory.
A number of new businesses (many online with shiny new expensive tracking websites) sprung up as a result, offering to obtain all the documents required and put these “packs” together for fixed fees.
A few years later and when the whole process was abandoned by the government as unworkable, all these new ventures were put out of business overnight.
You can read all about this fiasco here
Ten years on and the government seems to be having another go at “streamlining” the process of buying and selling your home. In particular, they are seeking views on ending the practice known as gazumping, where an offer can be accepted and then disregarded when a higher offer is received.
In many countries this is already illegal; once an offer is accepted the sale is binding on both parties.
A press release issued 22 October 2017 says:
As part of a continued drive to make the housing market work better, we want to hear from everyone with an interest in home buying including estate agents, solicitors and mortgage lenders.
We want to ensure that we address issues across the whole sector, from ways to tackle gazumping and reduce time wasting to increase commitment to a sale.
Views will be taken on:
- Gazumping – Buyers are concerned about gazumping, with sellers accepting a higher offer from a new buyer; we will look at ways this could be tackled.
- Building trust & confidence – Mistrust between parties is one of the biggest issues faced, we want to look at schemes including ‘lock-in agreements’. Although 1 million homes are bought and sold in England each year, around a quarter of sales fall through and hundreds of millions of pounds are wasted, we want to increase confidence in the housing chain
- Informing customers – How to provide better guidance for buyers and sellers, by encouraging them to gather more information in advance so homes are ‘sale ready’
- Innovation – You can now search for a home online, but the buying process is too slow, costing time and money so we’re looking for innovative digital solutions including making more data available online
I suggest you don’t hold your breath!
Given the government’s last attempt at re-forming the conveyancing process and on the basis of “once bitten, twice shy” it’s likely that there will be even more resistance and scepticism for any change to the process than the last time around.
I guess we will just have to hope that any proposals put forward are more thought through this time around and that the views of all the parties involved in the Conveyancing process are heard and taken into account.
Without the full backing of everyone involved I fear that history is likely to repeat itself.
Result? Another hugely expensive white elephant.