People who pull out of a house sale in order to take a higher offer from a new buyer could face fines under Government plans that aim to make buying and selling homes less stressful.
The proposals include “lock-in agreements” which would tie in the buyer and the seller, creating a financial penalty if either party pulled out.
Collapsing home sales cost consumers a combined £270 million a year.
A survey of 2,000 homebuyers for the Government found 13% blamed so-called gazumping for the collapse of their deal.
The poll also found 69% of sellers and 62% of buyers reported stress and worry as a result of delays.
Nearly half (46%) of sellers had concerns about buyers changing their minds after making an offer and almost a quarter (24%) would use a different estate agent if they had to go through the process again.
Almost a third (32%) of sellers and 28% of buyers were unhappy with the other party’s solicitor.
Although one million homes are bought and sold in England each year, official figures show a quarter of sales fall through.
The review will also examine whether putting more data online could speed up the house-buying process and the possibility of encouraging buyers and sellers to pull together evidence so homes are ready for sale.
Communities Secretary Sajid Javid has called for evidence from estate agents, solicitors and mortgage lenders to see how to streamline the process.
“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,” he said.
Mark Hayward, chief executive of the National Association of Estate Agents, welcomed the review.
“A home is often the biggest asset a person owns and we are committed to ensuring consumers receive the best level of service when they buy or sell a property,” he said.
Alex Neill from consumer group Which? said the current home-buying process is outdated and flawed.
He added: “The Government must put consumers first, ensuring that estate agents deliver a better service for both homebuyers and sellers and that the conveyancing process is simplified.”
But shadow housing secretary John Healey described the proposals as “feeble” and said they showed ministers do not understand the scale of the problems facing buyers.
He said: “This smacks of a political diversion from the hard facts of the Tories’ housing record.
“Home ownership is at a 30-year low and the number of younger homeowners is in freefall, but ministers can only come up with a ‘call for evidence’ on improving the home buying process.”
The call for evidence will run for eight weeks from Sunday.
DealMakerz thinks anything that makes selling and buying a house quicker and less stressful is to be welcomed.
Housing look set to be a key plank of next month’s Budget, with Philip Hammond being urged to win over younger voters in particular.
It was recently reported that a cut in stamp duty for first-time buyers could be on the cards – one of a series of measures that aim to restore intergenerational fairness to the system.
The Chancellor is also said to be considering moves to tackle the housing crisis by allowing the Government to free up public land and directly commission housebuilders.
Ending gazumping is unlikely to solve declining home ownership, but it could be a good place to start.
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