UK housing minister Mark Prisk has stated that the Government has no plan to reform the property buying process in England and Wales.
Answering a question from Welsh Tory MP Alun Cairns in the House of Commons, Mr Prisk, a former chartered surveyor, dismissed any idea that he considered the Scottish system superior.
Mr Cairns asked the Secretary of State for Communities and Local Government (CLG) what consideration the department had given to reforming the residential property purchase system; and what assessment had been made of the same process in Scotland.
Mr Prisk replied that there were no current plans to change the current residential property buying and selling system in England and Wales, where properties are sold ‘subject to contract’.
Under the Scottish system, a legally binding conditional contract is entered into as soon as terms have been accepted, from which neither side can withdraw without legal consequences. While this may have its advantages, housing markets are generally much more active in England and Wales, where chains are more common and can be long. Consequently, buyers and sellers using the Scottish system in England and Wales could find themselves bound to a contract before selling their existing home and buying a new one, with expensive implications such as bridging finance and the need to find temporary accommodation.
Sellers in England and Wales are free to choose from a range of options that can be used by those seeking more commitment and certainty that their transaction will be completed. These include ‘lock-out’ agreements, ‘option to purchase’, ‘conditional contracts’ or ‘costs guarantee’. There is nothing to stop property buyers and sellers agreeing to any of these arrangements on a voluntary basis.
The UK Government has cut the cost of moving home by abolishing the requirement for sellers to commission a Home Information Pack for properties.
The red tape involved increased the cost of selling a property, deterring sellers from putting their properties on the market, and the packs were not trusted by property buyers, so duplicating costs. The Government believe that the similar Seller Packs recently introduced in Scotland are another example of a more complex system.
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