In an effort to tackle the problem of buyers and sellers pulling out of property transactions without good reason, the Government has said that it will trial reservation agreements this year.
English and Welsh law as it stands allows buyers and sellers to pull out of transactions until contracts are exchanged with no penalties whatsoever, potentially leading to the collapse of long chains.
Speaking at the Council for Licensed Conveyancers’ annual conference, Housing Minister, Heather Wheeler, said: “We want to increase people’s commitment by ensuring they get some skin in the game… there is no reason why this cannot become a standard practice. I believe the appetite is there.”
Matt Prior, head of home buying and selling at the Ministry of Housing, Communities and Local Government added: “Buyers and sellers should have financial skin in the game to reinforce the agreement. But how much will that be? How much should they pay to get out of the agreement? We want to work closely with conveyancers to iron out some of the practical issues to encourage people to adopt this.”
Link: Home-buying reservation agreements to be tested this year