Gazumping to be outlawed in UK?

Gazumping may be outlawed in the UK, as part of the government’s new push to speed up the house purchasing process.

A house-hunter’s wost nightmare, gazumping is the name given to the situation when you have already made an offer on a property that has been accepted, only for another buyer to make a higher offer and snatch the home from under your nose.

The practice is not permitted in all countries – indeed, the law in Scotland and many European nations requires all property sales to be legally binding once an offer has been accepted by the seller. In England and Wales, however, sales only become legally binding once contracts have been exchanged, given rival bidders a window of opportunity to pounce.

At present, around one in five (18 per cent) sales fall through every year due to gazumping, leaving buyers with legal bills and others costs with no property to show for it. Consumers incur costs of around £270 million each year when transactions fall through, according to one recent report.

Soon, though, all that frustration could be over, as The Telegraph reports that the government has held private meetings with the property indudstry to discuss following Scotland’s lead and outlawing gazumping altogether.

The Department for Business Innovation and Skills (BIS) met with the National Association of Estate Agents last week, notes the newsapaper, with the BIS set to call for evidence from the industry about how it can make purchasing homes in England and Wales quicker and cheaper.

The meetings follow a document published last year, saying that the government “wants to consider and address the way the real estate and conveyancing markets have developed around the existing regulatory frameworks, encourage greater innovation in the conveyancing sector and make the legal process more transparent and efficient”.

Other options considered for speeding up the transaction procees include encouraging new business models, such as online estate agents.