27 October 2017 by Matthew Hawkins

An end to gazumping?

One of the most frustrating elements of buying a home in England and Wales is the threat of gazumping. Gazumping occurs when a buyer has had an offer to purchase a property accepted by the seller, but before the legally binding part of the transaction is reached, the seller accepts a better, usually higher offer from another buyer.  Surprisingly, there is currently nothing to protect buyers from becoming a gazumping victim, but change may be afoot.

The Government’s Communities Secretary, Sajid Javid, this week announced plans to make the home buying process cheaper, faster and less stressful for those involved. The Government wants to hear views, within the next eight weeks, from anyone with an interest in home buying including estate agents, solicitors and mortgage lenders.

The announcement follows a report published by Which? that found that people find moving home more stressful than having children. Specifically, the research says that 69% of sellers and 62% of buyers reported increased stress and worry resulting from delays in their transaction, and a lack of trust and confidence in the process contributed to their concerns. One million homes are bought and sold in England each year and around a quarter of these sales fall through, some as a result of gazumping, with millions of pounds being spent in vain.

Currently, when it comes to gazumping there are existing tools, called lock-in and lock-out agreements which, in theory, can be used to lessen the chance of a transaction from falling through but in practice, as they are unenforceable in the UK and the remedies limited, they are not very effective. In simple terms a lock-out agreement attempts to stop the seller negotiating with other parties during the lock-out period and in contrast, the lock-in agreement commits the both parties to negotiating with each other until a deal is agreed.

Other more effective ways to try and avoid gazumping is to ensure the conveyancing process runs as smoothly and as fast as possible. Quickly getting to a stage where the parties are legally committed reduces the chances of other higher offers being made. Practical steps buyers can take include:

  • having a mortgage in principle agreed;
  • get a surveyor ready to act as soon as possible;
  • ask the agent to confirm the property is off the market; and finally
  • instructing a good proactive lawyer specialising in residential conveyancing.

It remains to be seen what changes to the law will follow the consultation and how soon they will be brought in, but the announcement it is a welcome step forward – at least the problem has been officially recognised.

Once more is known, we will of course provide a further update.

In the meantime, if you would like further information on gazumping or the Government’s announcement or simply want to contact us for a conveyancing quote you can fill in our online form here or call us directly on 020 7288 4700.

13 October 2017 by

What’s in a name? The new Business and Property Courts of England and Wales

This month saw the launch of the new Business and Property Courts of England and Wales (‘B&PCs’).  This is the […]

20 October 2017 by

Seller’s checklist – how to prepare for due diligence

Mike Ashley, the owner of Newcastle United, has recently confirmed his plan to sell the club. His lawyer has stated […]

Signup To Our Weekly e-News

"*" indicates required fields

We’ll never share your details with any third party in line with our privacy policy.