Government keen to trial Reservation Agreements
Reservation Agreements locking home buyers and sellers into a transaction could be trialled by March, a government official has revealed.
A property law conference heard from Matt Prior, who has led home buying and selling work at the Ministry of Housing, Communities and Local Government (MHCLG) for the last two years, that the Government thinks Reservation Agreements are worth investigating. “I do not think it’s the complete answer, but it might be a temporary fix.” he said.
The government has pledged to make the buying and selling process quicker, cheaper and less stressful.
Prior also commented: “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.”
Buyers and sellers would be asked to put down some money to enter into the agreement. They would get some money back if the purchase doesn’t happen. Acceptable reasons for pulling out could include a bereavement, job loss, inability to get a mortgage or if the property is unmortgagable.
Prior stated that MHCLG is exploring links between the work being done on reservation agreements with work on making sellers provide some property information upfront. Behavioural insight research has also been commissioned, which is expected to be finished soon.
Ministers will then be asked if they want to test reservation agreements. If they agree, field trials may begin as early as the first quarter of next year.
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