The practice of ‘gazumping’ could be banned by the government after discussions were held on whether to bring forward the point at which house sales become legal, in line with Scotland.
The move could prevent many property sales falling through, with 18% or around 200,000 transactions collapsing on average each year.
A major reason for this is buyers outbidding others who have already had an offer accepted, known as gazumping.
It often leaves frustrated would-be buyers not only missing out on their dream home but still having to pay bills for surveying and legal fees which can run into thousands of pounds.
Policymakers at the Department for Business Innovation and Skills (BIS) recently held a private meeting with senior figures at the National Association of Estate Agents according to the Telegraph, at which the issue was discussed.
The idea of introducing the system which already exists in Scotland and in other European countries, whereby a property sale is legally binding at the point where an offer is accepted by the seller was floated.
Currently, deals made in England and Wales are only binding once the contracts have been exchanged, giving buyers with big deposits the chance to ‘gazump’ others.
While the new system would surely be a hit with buyers in England, some experts have predicted it could prove unpopular with sellers and even put them off moving house completely.
This is because they may potentially have to take on the cost of legal and survey fees currently borne by buyers, which typically exceed £1,000 per sale.
“The English system for buying and selling property dates back to the 1920s and has not been updated for nearly 100 years. It is an archaic system which doesn’t allow for modern technology. It needs updating to allow for as much work to be done before the point of offer as possible,” says Mark Hayward, managing director at the National Association of Estate Agents.