GAZUMBING: SOON TO BE BANNED?
Gazumbing & Buying: New Government Rules for Buyers & Vendors
The Government has launched a new hearing to understand better the relationship between the buyers and vendors, to make quick, cheaper and stress-free the process of buying and selling properties.
Until the 17th of December, the Government is calling for evidence to dig into the matter, asking consumers and industry experts to fill up a questionnaire where to explain their views in regards to the various aspects of buying and selling.
The includes the problem of gazumping, the practice where the seller accepts a higher offer after having accepted a first one from another buyer. It’s a controversial habit that causes the loss of £270M each year due to failed transactions.
It results that 16% of the buyers are actually concerned that, although they place an offer, the vendor can keep market the property and accept higher offers from a different buyer (gazumping), leaving the first one with nothing. Not surprisingly, it emerges the lack of trust between buyer and vendor.
The survey also enlights how lethargic the buying process in England and Wales is.
In these parts of the U.K.
The Law Society’s Conveyancing Protocol lays out 70 steps and procedures. So to bring a sale to its conclusion. But it only takes a single issue to hold up the entire transaction in England. And Wales or cause it to fall through completely.
A Government survey carried out on 2,000 buyers and sellers people reveals the 62% of buyers and 69% of the sellers have experienced delays in closing a transaction, missing deadlines agreed with the other party and generating useless stress and worry.
It can take up to several months to complete a sale in the England and Wales, yet just 5 days in Scotland. Something must be changed.
The solution can come from technology.
Technology helped already the property search and now buyers can look for properties. So through a smartphone, browsing social media and can receive immediate updates. Therefore in relating new instructions, signing for newsletters.
Technology did not impact the conveyancing side yet and the Government aims. Instead to introduce innovative digital solutions, bringing also the Land Registry into the new digital world.
E-conveyancing will become available. With the capability to have data promptly accessible online. So such as property leases, restrictions, covenants, giving the possibility to speed- up the buying process.
The Government is also willing to introduce lock-in agreement,
proposing a financial penalty if either party backs out. The stronger commitment to complete the purchase could also limit the risk of gazumping.
If you want to be part of the Government’ survey, just click here.
Or let us know what you think the Government could do to seed the process up.