It appears that Prime Minister May and The Secretary of State for Communities and Local Government, Sajid Javid, are clearly \u2018on the march\u2019 in trying to fix the \u2018broken\u2019 housing market. They want to build 300,000 homes per annum (the same number built in the 80s under Margaret Thatcher), expand Right-to-Rent and Right-to-Buy and of course, get rid of both gazumping and gazundering.<\/p>\n
If they succeed they will have done well, since for time immemorial, gazumping and gazundering has been the scourge of the Property Market. It is costly and very irritating to buyer and seller alike.\u00a0 So what is the answer?<\/p>\n
Where the problem lies<\/strong><\/p>\n The problem lies in the protracted time taken between agreement of terms, the obtaining of a mortgage offer and a structural survey which leads to the consolidation, by way of an exchange of binding contracts, where a non-refundable deposit is paid.<\/p>\n Both the USA and Scotland claim to have the perfect solution whereby, supposedly, you can exchange an immediate contract for purchase, pay a deposit, and this is designed to deny the opportunity of either buyer or seller reneging from the agreement. This system looks ideal save for the fact, that the \u2018devil is in the detail\u2019 i.e. they are subject to mortgage finance and structural survey and therein lies the difficulty.<\/p>\n As a seasoned veteran in the UK Residential Property Market for the last 41 years I know all the \u2018tricks of the trade\u2019. I can tell you that even with these \u2018quickie\u2019 exchanges a canny purchaser can \u2018wriggle out\u2019 of these agreements if they want to.\u00a0 By way of illustration, all the purchaser needs to do is to is to deliberately frustrate their own ability to obtain a mortgage or, overstate the surveyors concerns about the structure or services of a property and \u2018Bob\u2019s your uncle\u2019 you have \u2018wriggle\u2019 room to renege.\u00a0 This is a little \u2018lop sided\u2019 since it is more difficult for the seller to \u2018get out\u2019 of the contract than the buyer, which you could say, seems inequitable.<\/p>\n No Perfect Solution<\/strong><\/p>\n There is no perfect solution here but a \u2018half way house\u2019 version could be that the buyer and sellers solicitors agree to exchange an immediate \u2018lock out\u2019 agreement which gives the buyer time to organise their survey and obtain mortgage finance whilst the terms are fixed under this agreement. This, technically, could be signed within hours or days of an agreement in principal and is designed to prevent the parties being able to renege from the agreement.\u00a0 Unless a non-returnable deposit is lodged by the purchaser, they could still prevaricate, if they found a cheaper property elsewhere and would undermine the agreement if they wanted, so \u2018nothing is perfect\u2019.<\/p>\n Gazumping is a \u2018Bull Market\u2019 phenomenon, whereas gazundering is a \u2018Bear Market\u2019 equivalent. By their very nature they are unilateral processes i.e. one decided by one party not two, whereas, an agreement is a bilateral process which involves both parties.<\/p>\n In my travels I have known a seller who had previously \u2018given his word\u2019 to sell a property to a buyer and then \u2018bought his word back\u2019 for a sum of money (with the purchaser\u2019s agreement) in order to sell to another buyer at a better price.\u00a0 All three parties were delighted with the result and this is what we call \u2018ethical gazumping\u2019 which is far more morally fragrant.<\/p>\n In the absence of this simple measure, I\u2019m afraid that in Bull Markets gazumping will be rife and in Bear Markets so will gazundering. So life goes on!<\/p>\n Do you remember those ridiculous Home Information Packs (HIPs) that the Labour Party There were claims at the time that the packs contributed to the 2008\/9 housing crisis by Originally, HIP\u2019s were to become mandatory on June 1, 2007 and then, two weeks before The gargantuan ineptitude of governmental interference in the workings of the markets is Organisation needed for the building of 300,000 homes<\/strong><\/p>\n As for building 300,000 new homes, this will take a lot of organisation, money and the will to break the \u2018strangle hold\u2019 of the Green Belt, which the ecologists \u2018cling on to, for dear life\u2019. It is ridiculous when you think that only 6.8% of the UK\u2019s land area is classified as urban, which by simple mathematics means that almost 93% is not.<\/p>\n They need to take a \u2018sledge hammer\u2019 to the byzantine planning process through local councils, which is rife with petty politics and Nimbyism quite apart from the suffocating affects of the environmentalists, and goodness knows, there are enough of them. The Department of Environment, under Michael Gove, needs to absorb all but the trivial planning matters (not just the appeals), in order for properly trained planning inspectors to adjudicate on planning issues alone without being distracted by politics.<\/p>\n Permitted Development Rights, which enables office buildings to be converted into residential, was an act of total genius and we need more \u2018quick fixes\u2019 like this to \u2018shake up\u2019 the system.<\/p>\n","protected":false},"excerpt":{"rendered":" It appears that Prime Minister May and The Secretary of State for Communities and Local Government, Sajid Javid, are clearly \u2018on the march\u2019 in trying to fix the \u2018broken\u2019 housing market.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,7],"tags":[44,45,22],"class_list":["post-1475","post","type-post","status-publish","format-standard","hentry","category-property","category-viewpoint","tag-gazumping","tag-gazundering","tag-housing-market"],"_links":{"self":[{"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=1475"}],"version-history":[{"count":5,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1475\/revisions"}],"predecessor-version":[{"id":1976,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1475\/revisions\/1976"}],"wp:attachment":[{"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=1475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=1475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=1475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\ntried to introduce under the Housing Act 2004, which supposedly was done to reduce
\ngazumping and gazundering?<\/p>\n
\ndeterring vendors from marketing their homes due to the extra costs in the survey.<\/p>\n
\nthe deadline, they were spectacularly scaled down to what is now just an EPC (Energy
\nPerformance Certificate) that is another piece of useless bureaucratic, pointless, hurdle that nobody ever wants or takes any notice of.<\/p>\n
\nlegendary and this is a perfect example.<\/p>\n