Plans to end ‘gazumping’ in England

A series of reforms have been announced which will improve the homebuying process in England and Wales, including putting a stop to ‘gazumping’.

Gazumping explained

In June, Starmer’s Labour Government unveiled plans to simplify and speed up housing sales. One key element is an end to gazumping - when buyers are outbid on a property after an offer has been accepted. Gazumping can currently happen at any point up until contracts are exchanged, so a buyer could be going through the conveyancing process, with the home listed as sold subject to contract. Another party could then come in and make a higher offer at the last minute, causing the original buyer to be pushed out. This often comes at a high cost for the gazumped buyer, who has put time and money into the homebuying process. To prevent this, Starmer’s government announced that sales agreements will become legally binding at an earlier stage. If a party breaks these terms without a valid reason, they would face a financial penalty. This is already the case in Scotland, where the homebuying process is often quicker than in other parts of the UK.

Introducing sales packs

To introduce binding conditional contracts, sellers and estate agents will be required to share more information about the property upfront in the form of sales packs. This will ensure that buyers have access to all relevant information about the home’s condition, leasehold costs and chain status, allowing them to make an informed decision before placing a formal offer.

Raising standards for estate agents

According to the government’s roadmap, later this year there will be a Code of Practice for estate agents, with minimum standards and guidance to improve the information included in property listings. In 2027, there will be a consultation into mandatory qualifications for estate agents to support efficient transactions.

A smoother process

It is anticipated that these reforms will save time and money. One in three sales currently fall through, costing sellers around £400m per year in England and Wales. The average purchase takes 120 days, but the government estimated that the changes will reduce homebuying times by about four weeks and save the average first-time buyer £650.

Starmer’s government planned to implement the changes by the end of Parliament in 2029, but we await further information from Burnham’s government regarding the roadmap.

Here to help

If you would like support with any part of the homebuying process, our experts are here to help. We can source a mortgage that is right for you and your circumstances – just get in touch today.

Your home may be repossessed if you do not keep up repayments on your mortgage

Sources:

https://www.bbc.co.uk/news/articles/c6216g52p8wo

https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/what-is-gazumping-how-avoid-it/

https://www.gov.uk/government/news/homebuying-shake-up-to-slash-delays-cut-costs-and-stop-sales-falling-through

https://www.moneysavingexpert.com/mortgages/buying-a-home-timeline-scotland/