One of the greatest sources of frustration with the house buying and selling process in England and Wales, is that the sale or purchase can fall through, just before exchange, leaving buyers and sellers disappointed, deflated and financially disadvantaged.  Will this practice be outlawed?

The concept of ‘gazumping’ has existed for a while and this occurs when a buyer is ‘outbid’ by a higher offer, from another buyer, just before exchange of contracts.  This is difficult when the property being sold has been repossessed or subject to probate, as the seller is likely to be under an obligation to achieve the best possible price.  In recent years the concept of ‘gazundering’ has also become more prevalent, whereby a buyer offers a reduced price, just before exchange of contracts, leaving the seller with no option but to accept.  Both concepts cause great unhappiness and can result in significant financial loss for those affected.  

In the most recent budget, the Government called for fundamental and far reaching reforms of the housing market and conveyancing process.  The Department for Business, Skills and Innovation have been investigating and seeking feedback from interested stakeholders. The Treasury have estimated that around £270M is lost on abortive transactions per year and that around 200,000 transactions fail to exchange contracts during this period too.