Buying or selling a home can involve weeks, sometimes months, of uncertainty.

An offer may be accepted, solicitors may be instructed, searches may be ordered and mortgage arrangements may be underway. However, under the current system in England and Wales, the transaction is usually not legally binding until contracts are exchanged.

Until that point, either side may be able to withdraw. A buyer may lose the property if the seller accepts a higher offer. A seller may find that a buyer pulls out late in the process, leaving them with wasted time, cost and disruption to their onward plans.

The Government has now set out proposals aimed at making the process more certain. One of the most discussed changes is the introduction of legally binding agreements earlier in the transaction, with the aim of reducing gazumping and preventing parties from walking away without a legitimate reason.

The proposals are significant, but they are not yet law. The detail still needs to be developed, and any changes will need to be introduced carefully.

What is gazumping?

Gazumping usually happens when a seller accepts an offer from one buyer, but later accepts a higher offer from someone else before contracts have been exchanged.

For the original buyer, this can be extremely frustrating. By that stage, they may already have paid for conveyancing work, searches, surveys and mortgage arrangements. They may also have made practical decisions based on the assumption that the purchase is progressing.

In most cases, if contracts have not been exchanged, the buyer has little legal power. The accepted offer is usually still “subject to contract”, which means the legal commitment has not yet been made.

There are other risks too. A buyer may reduce their offer late in the process, withdraw entirely or find that another part of the chain has collapsed. Sellers can also be left facing delay, additional cost and uncertainty.

This is the problem the Government is trying to address. The aim is to create a process where both sides have clearer information earlier and a stronger commitment before significant time and money have been spent.

What is the Government proposing?

The proposals focus on giving buyers more information at an earlier stage and creating greater commitment once a transaction is underway.

One key part of the plan is the use of upfront sales packs. Sellers and estate agents would be expected to provide important information about the property when it is listed for sale. This may include details about the condition of the property, whether it is leasehold, any leasehold costs and whether the seller is part of a chain.

Another part of the proposal is the introduction of binding conditional contracts earlier in the process. These would be designed to stop buyers or sellers from withdrawing without a valid reason once they have committed to the transaction.

The Government has also referred to wider digital improvements, including digital property logbooks, digital identity checks, electronic signatures and better sharing of information between professionals involved in the transaction.

The overall aim is to make the process faster, clearer and less vulnerable to late collapse.

What could the benefits be?

For buyers, the main benefit would be greater certainty. Once an offer has been accepted and the relevant agreement is in place, there may be less risk of losing the property because the seller accepts another offer.

For sellers, earlier commitment from the buyer may reduce the risk of a late withdrawal. This could be particularly useful where the seller is relying on the sale to fund an onward purchase.

Upfront information could also help both sides identify issues sooner. Leasehold costs, missing documents, planning matters, rights of way, service charge information, building regulation certificates and chain complications can all cause delay when they arise late in the process.

If those issues are raised earlier, there may be a better chance of resolving them before they threaten the transaction.

There is also a practical human benefit. Moving home is stressful because people are often making major financial and personal decisions while the outcome remains uncertain. A system that provides more information and greater commitment earlier could help reduce some of that uncertainty.

What still needs to be resolved?

The proposals also raise important questions.

One of the biggest is what would count as a legitimate reason to withdraw. A buyer may receive a survey revealing serious defects. A mortgage offer may be withdrawn. A lender may refuse to lend because of the property. A buyer’s own sale may fall through. A seller may face illness, bereavement or another major change in circumstances.

Any new system will need to distinguish between someone withdrawing for a genuine reason and someone pulling out without proper justification.

The level of any financial penalty will also need careful thought. A penalty must be strong enough to discourage unfair behaviour, but not so severe that it traps people in transactions where there is a valid reason to stop.

There will also need to be a clear process for resolving disputes. If one party says they had a legitimate reason to withdraw and the other disagrees, the process must not create further delay and cost.

The quality of sales packs will also be crucial. Upfront information only helps if it is accurate, complete and properly understood. This will be especially important for leasehold properties, new builds, shared ownership homes and properties with title, planning or access issues.

Why early legal advice will remain important

The proposed reforms are intended to improve the process, but they will not remove the need for legal advice. In many cases, early advice may become even more important.

For sellers, speaking to a conveyancing solicitor before a property is listed can help identify issues that might delay a sale. This could include missing planning documents, building regulation certificates, leasehold information, management company details, title restrictions or questions about ownership.

For buyers, early advice can help them understand what information has been provided, what still needs to be checked and what they may be committing to if earlier binding agreements are introduced.

A smoother transaction often depends on preparation. The sooner documents are gathered, enquiries are raised and legal issues are understood, the easier it is to reduce avoidable delays.

The Government wants to move towards a system where information is provided earlier, commitment comes sooner and avoidable fall throughs are reduced.

Anyone thinking of selling can take practical steps now by gathering key property documents early. Buyers should also be ready to take advice promptly once they find a property.

stevensdrake solicitors advises buyers and sellers on all stages of residential conveyancing. If you are planning to buy or sell a property and would like clear, practical guidance, please contact our Residential Conveyancing team.