Bag's Rants

I love the way the government justifies anything they do.

Reading this article about the house packs that are being made compulsory. Although they are not coming into force in 2007 as planned. Read more here.

The bit that tickled me. As these things normally do is the little bit of justification at the bottom.
'The government says the packs will cost about £650 for each seller to put together, but save buyers £1m a day, which they currently waste in aborted transactions.'
Sounds reasonable but note the change of scale, from an individual cost to a total cost which does not give any solid figures for comparison. There could be 1m houses going on the market every day and even at just £650 a pop that makes the £1M saving pale into insignificance. Although some are talking about £1,100 for the packs. The bottom line is that the buyer will have to pay for these packs so the cost of buying will undoubtedly go up.

In my experience, which is all I have, I have only known one person who was gazumped. Out of dozens. So I'm going to stick a figure of 10% in to be overgenerous as I am. So to save 10% of the people from the costs of gazumping we will make everyone pay to spread the cost and, by the way, it still won't stop gazumping.

Gazumping is where once someone has made an offer and it has been accepted the seller is expected to honour that agreement. The agreement is not in writing nor is the agreement enforceable in law, mainly because the buyer may have to opt out if he can't get funding or sell his own house. The seller then receives another offer that is more money or is more in line with his requirements. If he accepts this offer the first buyer is classed as gazumped. This happens with everything sold. Selling a car, first one with the money usually gets it. It's because houses take so long to buy there is more chance for someone to rethink and return with a better offer. The packs are aimed at reducing the time for the transactions by removing searches etc. and thus the time for better offers to come in. I can be gazumped on a car in a matter of hours. Can't see the packs making a house buy in a day so it isn't going to go away and people will adapt to fit into the shorter timescales.

All in all, a move in the right direction but perhaps if the government removed the bureaucracy involved in buying a house and opened up things like searches it would make a real difference without any additional costs then they would see an improvement. Removing regulation. Is that possible?

Gazumping may reduce or even stop but I don't see how, so that target of £1M may not be achievable. A government initiative that may not meet its targets and increases bureaucracy and costs for the public. Who could believe it? In the mean time, as usual, costs go up for everyone.

posted by Bag @ 10:22 am