Home buyers and sellers in England and Wales can expect an end to the practice of gazumping under a major shake-up of the property market announced by the government. Legally binding sales agreements will be introduced earlier to prevent buyers or sellers walking away without a legitimate reason, a move that Housing Secretary Steve Reed said will make the system “faster, fairer and more secure.”
At present, a buyer and seller may agree on a sale only for the seller to pull out weeks or months later because someone has offered a higher price. For the gazumped buyer, there is currently no legal recourse. The planned reforms, first announced in October last year, will be introduced at the end of this Parliament in 2029. Previous attempts to improve the system have had limited success and few of the latest changes will happen immediately.
“Legally binding sales agreements will end gazumping in England and Wales, saving buyers £650 on average.”
Under the proposals, sellers and estate agents will be required to share important information about a property, including its condition and status in a chain, through so-called sales packs. Home buyers will receive more information about listed properties up front. The government estimates buyers will save about £650 on average.
The changes have echoes of Home Information Packs introduced by a Labour government 20 years ago, which were swiftly dropped by the coalition government. The plans have been widely welcomed by the housing sector, although some have raised concerns about unintended consequences, such as properties taking longer to get onto the market as paperwork is prepared.
The timetable suggests a new code of practice for property agents will be introduced this year. Prime Minister Sir Keir Starmer said the current system leaves “people in limbo” and puts the prospect of home ownership out of reach for some. “We’re turning the page. Our reforms will bring this outdated process into the modern age, saving people time and money, and giving them the certainty they deserve,” he said.
In other countries, there are penalties for pulling out of a sale once both parties have agreed to the transaction. In Scotland, formally accepted offers are already legally binding, and sellers must provide home surveys to prospective buyers. Once the buyer’s and seller’s solicitors have exchanged letters, known as missives, if a party withdraws they are liable for financial losses to the other party. Under the government’s proposal, binding conditional contracts would make a transaction legally binding much earlier, potentially once an offer is accepted.