New rules could be put into place as the Government looks for ways to make house buying easier.
Communities Secretary Sajid Javid has launched an investigation that will collect evidence from estate agents, mortgage lenders and solicitors, in an attempt to make the process “cheaper, faster and less stressful.”
Some issues that will be explored are:
- ways to tackle ‘gazumping’, a technique used by sellers to accept the highest offer to the detriment of the buyer
- building “trust and confidence” between buyer and seller, with schemes such as the ‘lock-in agreements’, where the two parties agree to ‘lock’ themselves into negotiations
- encouraging buyers and sellers to collect information in advance so homes are “sale ready”
- innovating the house buying process by making more information available online and providing buyers and sellers with more digital tools.
Mr Javid said: “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.”
Shadow Housing Secretary John Healey dismissed the initiative as “feeble” and said that the Government does not understand the scale of the problems faced by homebuyers.
He said: “This is a government out of touch and out of ideas. Conservatives know housing was a big part of why they did so badly at the election but after seven years of failure Ministers still have no plan to fix the housing crisis.”
But Twitter users have welcomed the plans, many calling the battle against gazumping “long overdue.”
— Paren (@ParenRaval) October 22, 2017
— Neil Chaudhuri (@neil_chaudhuri) October 22, 2017
What is gazumping?
“Gazumping” is a practice used by home sellers to maximise their profits; it involves accepting a higher offer for a property after an agreement has been reached with another potential buyer.
It is not illegal in the UK; however, it is much more common in England than in Scotland because of different regulations.
The practice has been on the rise in the past two years, with London being, unsurprisingly, the area where gazumping is most common. Reports show that around 35% of London buyers have experienced being ‘gazumped’ since 2015 – more than twice as many as in the second most-hit area, the South East, where 16% of buyers have been affected.
Words: Silvia Tadiello | Subbing: Lotta Behrens