by Amber Rose
The RICS warned this week that its members would resist any attempt to introduce conditional contracts for house purchases.
It was commenting on the government’s pilot report, published this week, which found that Britain has the slowest system of house buying in the world and that conditional contracts contributed to the speed of purchasing in many other countries.
The comparison with 10 countries was carried out on behalf of the government steering group investigating house buying problems.
It found that most countries made use of conditional contracts which incorporate a clause making the sale conditional on the buyer being able to obtain finance.
But director of professional services of the RICS Adrian Britton said he was cautious about introducing conditional contracts. “How willing is the buyer or seller to enter into an earlier contract? It’s not unreasonable to suggest that the market is unwilling to bind much earlier. The govern-ment would legislate only if it’s an advantage to both parties and not to the benefit of one party.”
According to the report, gazumping would be eradicated if the seller was subject to a contract agreement. “It would eliminate this problem, but only 2.5% of transactions involve gazumping. We feel it would be unwise to have a statutory framework,” said Britton.
However, the National Association of Estate Agents is much keener on conditional contracts. “We would like to see a move toward conditional contracts. If we speed up the process and introduce provisional contracts, gazumping will disappear,” said chief executive Hugh Dunsmore-Hardy.
Announcing the results of the pilot study, housing minister Hilary Armstrong said the best way to deal with delays is to get more information on the table at the very start of the house buying process.
She said: “This could involve the seller preparing details for prospective buyers before putting the house on the market.”
Items included could be title deeds, replies to standard pre-contract enquiries, Land Registry certificate and local authority searches.
“I am committed to identifying the root causes of delay in the home buying process and ways of addressing these and other problems which cause home buyers and sellers so much frustration and stress,” she said.
| HOUSE PURCHASE COMPLETION TIMES | |
|---|---|
| Country | Weeks |
| England and Wales | 10-12 |
| France | 6-13 |
| Australia | 8 |
| Portugal | 6-8 |
| US | 6 |
| Hong Kong | 6 |
| Denmark | 6 |
| South Africa | 5-9 |
| Canada | 5-6 |
| Netherlands | 4-6 |
| Sweden | 4-6 |
