The government has revealed the timetable for its much-heralded reservation agreements trial within the housing market, which is to take place between January and March next year.
Common in Europe and elsewhere, the proposed scheme would see both buyers and sellers being asked to put down a cash deposit of between £500 and £1,000 before entering into the offer process.
This would mark a radical departure from the long-standing system of buying homes in the UK and, it is hoped, reduce the period between offer and exchange by eliminating those not honest about their reasons for selling or buying a property.
The announcement was made at a law industry conference by government representative Matt Prior (left), who is the lead official at the Ministry of Housing, Communities and Local Government for the project.
“You’ve got a process that lasts 20 weeks. Why not try to lock people in a lot earlier? You have people who have tried to move two or three times, the buyer pulls out days before, it’s heart wrenching,” he said.
Industry figures suggest that between 25% and 33% of potential housing transactions currently collapse when buyers or vendors withdraw from deals after the offer process has been completed.
This costs the housing market approximately £270m a year and there are hopes reservation agreements will drastically cut these numbers.
Prior also revealed at The Law Society’s £300-a-head regulations and transparency conference held in London that his ministry is also considering whether sellers should be compelled to provide more property information up front, a move that would echo the Home Information Packs that Labour housing minister Yvette Cooper attempted to introduce during the mid-noughties.