Is this the end of gazumping? A major change in the home-buying process is set to mend our 'broken' system
In a move to make it less stressful, under plans expected to come in from 2029, both buyers and sellers would face fines for backing out at a late stage
One of the biggest changes in the home-buying process could come into effect by 2029, with the government planning to speed up housing sales in England and Wales, and prevent ‘gazumping’.
As anyone who has ever completed a sale knows, buying and selling a house can be stressful. And we're not even just talking about decluttering your personal belongings or styling your home to sell more easily. It's the things that are out of your control that really make it an uphill battle, including a system that many agree needs to be changed.
As it stands, gazumping is one of the biggest issues facing buyers and sellers in a chain. After agreeing on a sale, a seller can pull out at any point in the process if someone offers a higher price. For the buyer, there’s currently no legal recourse and any fees spent in the process are simply lost.
Under the proposed plans, legally binding sales agreements will be introduced to stop buyers or sellers from walking away at a late stage without a legitimate reason. If either side breaks that agreement by withdrawing without a valid reason, there will be financial penalties.
Other changes will include home buyers receiving more information about listed properties, with sellers and estate agents required to share information about the property’s condition and status in a chain.
Housing Secretary Steve Reed believes the planned reforms will make the system "faster, fairer and more secure".
Many are in agreement that England and Wales's system is not the most effective, and, while sharing her top tips for selling a home recently, property expert Kirstie Allsopp went as far as calling it "broken".
Having seen first-hand the impact the current complicated system can have on a purchase or a sale, Kirstie said the only way to make it work is when "the vendors and the purchasers communicate with each other and really drill down into the delays and tell each other."
Debating the proposed changes on This Morning, there was a notable difference in opinion. While Gyles Brandreth was in support, arguing that gazumping was another stressful factor in what is already one of the most stressful situations, comparable to that of “a death in the family”, Bryony Gordon is worried the fines might be putting more burden on people’s stretched budgets.
She said, "I just think, why are we penalising people? There's a housing crisis in this country where you have eight and a half million people who can't access adequate housing. Many more who can never dream of getting on the housing ladder.
"It just seems to me such a strange little thing to be bringing in new legislation about."
However, when the debate moved to social media, some comments were quick to point out that some of these proposed changes are already the done thing elsewhere. One person wrote, 'In Scotland, the person who pulls out of a sale after the buyer has paid out monies… has to pay the buyer back'.
Another shared, 'In Portugal, when you have an offer accepted, you sign an agreement on timing and pay a deposit. If you don't complete, you lose the deposit; if the seller pulls out, they pay double the deposit for breaking the agreement.'
And, per a third comment, 'In Australia, when you decide to buy a house, you have to sign a provisional contract right at the start. You can get out of that contract if inspections or searches come back with an issue. From start to finish, the whole process only takes 4-6 weeks.'
So, is it about time England and Wales simply catch up with the rest of the world?
