This Commons Library briefing paper provides information on the English and Scottish conveyancing systems. Constituents who have been 'gazumped' frequently ask why the Government does not act to make gazumping illegal in England and Wales. Specifically, they ask why the Government does not introduce the Scottish system of conveyancing. The Government announced plans in the March 2016 Budget to review the process with a view to making conveyancing "better value for money and more consumer friendly."Jump to full report >>
The practice of sellers agreeing a sale price only to accept a higher offer from another buyer late in the process (gazumping) tends to increase in a rising property market. In England and Wales sellers accept offers 'subject to contract' - these agreements are not legally binding and either party can withdraw without penalty until the point at which contracts are exchanged.
An additional feature of the English and Welsh system of conveyancing is the time it can take to reach the point at which contracts are exchanged, thus increasing the opportunity for sellers to attract (and accept) higher offers.
Gazumping is not illegal in Scotland, as is often suggested; however, there are certain aspects of the Scottish system which reduce the likelihood of its occurence. In particular solicitors dominate the Scottish home-buying market rather than independent estate agents. The Law society guidelines put significant professional restrictions on gazumping. A solicitor should decline to act for the seller if they accept a later offer from another party, unless the original offer has fallen through.
In Scotland residential properties are required to be marketed with a "Home Report" including a survey of the property, an energy report and a property questionnaire. In the English system the only upfront information required at present is an Energy Performance Certificate(EPC).
A better deal: boosting competition to bring down bills for families and firms, published by the Treasury in November 2015, contains a section on the home-buying process and announced that a call for evidence would take place. In the March 2016 Budget the Government said that it plans to look at “how to make the process better value for money and more consumer friendly”.
This note provides an overview and comparison of the two systems of conveyancing and the current prospects for reform in England and Wales.