Aim
To bring certainty to the buying and selling process by providing standard wording for a reservation agreement between buyer and seller.
How it works
The agreement will be conditional upon the information available at the point of acceptance of offer and the buyer and seller’s circumstances.
Both parties will pay a commitment deposit which they will lose if they breach the terms of the agreement.
The aim is to deliver the reservation agreement through technology to make it as seamless as possible. There will be protection for the deposit monies and an arbitration process.
Current progress
The HBSG have agreed standard wording for the reservation agreement to be used in research.
The Ministry employed a behavioural research company who analysed feedback from the industry and consumers. The consumer focus groups indicated that consumers would require all material information about the property, and its title, to be available prior to entering into a Reservation Agreement as they would expect to be able to withdraw from the transactions without financial penalty if they found out an issue with the property that would prevent them using the property how they planned or getting a mortgage through their preferred mortgage lender.
The research company were instructed to conduct further research to outline whether, and how, a pilot should take place and what should be included in that trial. The report was issued to the Department of Levelling Up Housing and Communities at the end of 2021; since then the Department published their Levelling Up White Paper which references the provision of information upfront in the home moving process.
**Feedback awaited 2022**
Register your interest in participating in any pilot by completing the below form:
