Communities Secretary Sajid Javid has launched another call for evidence, this time as part of a government push to reform the buying process which could see gazumping outlawed.
Just days after revealing he wanted to make life fairer for leaseholders, Sajid says he wants to hear from estate agents, solicitors and mortgage lenders about how to stop gazumping, reduce time wasting and ensuring buyers commit to a sale.
In his call for evidence, the Communities Secretary says mistrust between parties is one of the biggest issues faced by the industry and wants to introduce lock-in agreement to improve it, highlighting how a quarter of house purchases fall through each year.
Other measures include ‘encouraging’ sellers to provide more information before they put their property on the market – which sounds like a ‘lite’ version of Labour’s Home Information Packs – and encourage more digital innovation to help speed up the buying process by making more data available online.
This refers to more recent innovations such as the blockchain technology developed by Bitcoin that enables processes to move forward automatically without the need for huge amounts of paperwork and human intervention.
The first property in the UK – a retail unit – was recently sold this way last week.
The Department of Communities and Local Government (DCLG) has today also revealed research among 2,000 people about their experiences of the buying process, which found that 69% of buyers and 62% of sellers reported experiencing “stress and worry” during the process, and that 24% of sellers would use a different estate agent if they moved again.
“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,” says Sajid Javid (pictured, left).
“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 take action to make the process cheaper, faster and less stressful.
“This can help save people money and time so they can focus on what matters – finding their dream home. I want to hear from the industry on what more we can do to tackle this issue.”
Industry reaction
Mark Hayward, Chief Executive, NAEA Propertymark, says: “NAEA Propertymark has long been calling for more regulation of the estate agents sector to ensure that consumers are protected when dealing with the biggest asset most people own, their home.
“We are delighted that Government has chosen to include further estate agents regulation in the scope of their Call for Evidence into the house buying and selling process. This is a welcome review of the process, which is currently archaic and does not reflect the twenty first century.”
Russell Quirk, CEO of agent eMoov, says: “The law needs to change to ensure there is a contractual obligation and to protect home buyers much earlier on in the process.
“One common misconception is that gazumping is the work of the agent in order to secure more commission on a property. However, this practice is often orchestrated by the seller and without the support or encouragement of the agent, although they take the blame.
“These property market ‘fall-throughs’ cost £1bn per annum in wasted legal and survey costs, money that could be better spent elsewhere in tackling the housing crisis.”
The call for evidence will run for eight weeks, and agents can respond online here.
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