Posts with tag: gazumping

Government Could Ban Gazumping in Property Market Shake-Up

Published On: October 23, 2017 at 9:04 am

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The Government could move to ban gazumping in order to save time and stress during the property purchasing process.

The Communities Secretary, Sajid Javid, has called on the property industry to provide evidence on how buyers and sellers can save time during the home buying process, with any streamlining through technology also being considered.

One area of focus is to make selling and buying property cheaper, faster and less stressful by tackling the practice of gazumping.

The Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, has contributed to the study, providing his thoughts on gazumping and how it can be tackled head-on to improve the property sector.

Government Could Ban Gazumping in Property Market Shake-Up

Government Could Ban Gazumping in Property Market Shake-Up

He says: “Gazumping really is the scourge of the property market and a practice that is facilitated through a draconian, archaic conveyancing system, the likes of which is shared only with Papa New Guinea, which leaves large numbers of buyers extremely disappointed and out of pocket. During the most stressful part of the property purchase, it further exacerbates the emotional turmoil a buyer can find themselves in, and can crush their hopes and dreams of securing that perfect property.

“The law needs to change to ensure there is a contractual obligation and to protect homebuyers 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.”

He adds: “These property market fall-throughs cost £1 billion per annum in wasted legal and survey costs – money that could be better spent elsewhere in tackling the housing crisis.”

Quirk has compiled a list of what he believes needs to be done to improve the property market:

  • Encourage e-conveyancing to ensure that all documentation is in one place and digitally accessible quickly, and at the same time across multiple parties.
  • Ensure that surveyors, local authorities and mortgage lenders are legally compelled to work faster and for the buyer, not against them.
  • Allow electronic signatures to be used within the process.
  • Introduce title insurance as they do in the USA.
  • Force the conveyancing process to deal with the multiple work streams in parallel, rather than consecutively.
  • Introduce earlier contractual obligation on the part of the seller and buyer, similarly to Scotland and the USA.

Alongside its call for evidence, the Government has published the findings of a survey of 2,000 people, which showed that 69% of sellers and 62% of buyers report stress and worry as a result of delays.

Almost half (46%) of sellers had concerns about buyers changing their minds after making an offer, while almost a quarter (24%) would use a different estate agent if they had to go through the process again.

Nearly a third (32%) of sellers and 28% of buyers were dissatisfied with the other party’s solicitor, the study also found.

The call for evidence will run for eight weeks from yesterday (Sunday 22nd October 2017).

Javid comments: “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. 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.”

The Chief Executive of NAEA Propertymark (the National Association of Estate Agents), Mark Hayward, responds to the consultation: “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 21st century.”

Property Buyers in London Most Likely to be Gazumped

Published On: July 19, 2017 at 9:43 am

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Property buyers in London are the most likely to be gazumped out of their purchase, found the latest research by online estate agent eMoov.co.uk.

Property Buyers in London Most Likely to be Gazumped

Property Buyers in London Most Likely to be Gazumped

The agent asked 1,000 UK homeowners whether they were gazumped during their most recent property purchase. The results found that in the last two years, an over-inflating market has seen the practise of gazumping rise from 13% in 2015 to 36% in 2017.

Of the 36% of respondents who have been gazumped, the regional breakdown is as follows:

Although the capital’s property market has seen the largest wobble in buyer interest following the Brexit vote and more recent General Election, London buyers are still the most likely to be gazumped, with 35% of them saying that they have been pipped to the post on their most recent property sale.

Over the last two years, the average house price in the capital has surged by 17%, which could be an influential factor in the increasing number of homeowners being gazumped, which is up from 17% in 2015.

The South East has the second highest rate of gazumping, at 16%, with both this region and London also home to the highest average house prices of all UK areas.

However, the North West (9%), West Midlands (7%), and Yorkshire and the Humber (6%) have seen the next highest levels of gazumping, despite having much lower average house prices.

eMoov also asked those that have been gazumped which was the nearest major city to where they lived. Outside of London, the next highest level of gazumping was in Manchester, at 27%, Birmingham, at 26%, Leeds, at 23%, Cardiff, at 20%, Brighton, at 19%, and Southampton, at 19%.

The Founder and CEO of eMoov, Russell Quirk, responds to the findings: “Unfortunately, it would seem the practise of gazumping is once again becoming more prominent, as market values continue to climb higher. Traditionally, it becomes rife in over-inflated markets, where high demand and higher prices push buyers to resort to dirty tactics in their desperation to secure the property they want.

“In the last few months, the market across the UK and London has cooled, due to levels of uncertainty with the addition of a fall in stock levels, but, despite this, there are pockets of the capital, and elsewhere around the UK, that have remained hot where buyer demand is concerned.”

He continues: “This is demonstrated by some of the more affordable regions of the UK also seeing some of the largest levels of gazumping, such as the North West and the Midlands. The London market remains the most cutthroat by a long shot, however, buyers are still being gazumped nationwide, from Manchester, Liverpool, Newcastle, Leeds, Brighton, Reading and Cardiff.”

Government to Make Gazumping Illegal to Speed Up Buying Process?

Published On: May 11, 2016 at 11:16 am

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The Government is reportedly planning to make gazumping illegal in order to speed up the home buying process.

Ministers are considering a crackdown on buyers and vendors who pull out of a deal at the last minute, or who try to gazump or gazunder each other.

They plan to make house purchases legally binding much earlier in the process, for example, when an offer is accepted. If either the buyer or seller pulls out afterwards, they

Government to Make Gazumping Illegal to Speed Up Buying Process?

Government to Make Gazumping Illegal to Speed Up Buying Process?

must pay the other party’s costs.

In March’s Budget, the Government said that it would call for evidence on how to make the buying process better value for money and more consumer friendly.

It now seems that the Government is planning to call for that evidence in the near future, through a consultation on speeding up and improving the home buying process.

A spokesperson has ruled out importing the Scottish system. In Scotland, deals are binding once missives are exchanged, which prohibits gazumping and gazundering.

The Managing Director of the National Association of Estate Agents, Mark Hayward, believes that alternatives could include having a pre-contract agreement or charging the buyer a deposit. However, he thinks these options would be unpopular.

He also warns that the Scottish system is not perfect.

He says: “The Scottish system is sometimes referred to as the ideal system, but if you speak to people in Scotland, they may disagree. The onus is on the purchaser who has to have carried out all the checks before making an offer on the off chance that it would get accepted.

“We perhaps need a hybrid system. In France, you have a ten-day cooling off period after an offer is accepted.”1

Hayward also believes that the whole legal process of buying a property needs an overhaul.

Estate agent Chris Wood, of PDQ Property, agrees.

He says: “Gazumping is a problem, but it is not the main problem. The problem doesn’t happen as often as people think.

“What is needed is a review of the process so there are minimum statutory time periods that parties like solicitors and mortgage lenders have to respond in. Banning gazumping won’t solve the problem of delayed or failed property sales. Some would say that is just how the price is tested.”1

How do you believe issues with the property buying process could be resolved?

1 http://www.propertyindustryeye.com/government-considering-making-gazumping-illegal/