‘Reservation agreements’ would reduce fall-throughs says consumer group
Calls have been made for the introduction of ‘reservation agreements’ in order to build commitment between buyers and sellers.
Where a property purchase falls through, HomeOwners Alliance has stated that a payment of £1,000 should be made by the party responsible, in order to compensate the other side.
The organisation say that this legally binding commitment – known as a reservation agreement – would reduce the amount of transactions that fall through. It forms part of their response to the ‘Call for Evidence’ put forward by the Government last month.
According to the consumer group, fall-throughs are costing buyers and sellers over £500 million each year, hence why they have felt the need to prioritise addressing this issue in particular.
Commenting on the need for this to be reformed was chief executive of the HOA, Paula Higgins. She stated: “This is the true cost of the UK’s not-fit-for-purpose home selling and buying system – home owners losing more than £500m down the drain every year.
“It is no surprise that some parts of the property industry have too often resisted previous government attempts at reform – this is extra business for them.”