Continuum advocates changes to English residential property purchase system

House-buyer withdrawals used to be a rare occurrence but financial advisers in the Continuum partnership are now seeing the majority of house purchase chains encountering a buyer withdrawing somewhere within the chain, causing delays or a complete failure of the chain.

In the event of a collapse in the housing purchase chain, buyers face losses of up to £3,000 covering conveyancing fees, property surveys, local authority searches and mortgage application fees. Whilst the average loss amounts to hundreds of pounds, rather than thousands, spread across the market it adds up to a large amount of wasted money at a time when household budgets are already stretched due to the cost of living crisis.

Under the current system in England and Wales, buyers are free to withdraw from a house purchase at any point before the exchange of contracts without any penalties.

Continuum is calling for a change to the system, with buyers committing funds up front with a legal obligation to buy, similar to the system currently in place in Scotland.

Anthony Harris, Independent Financial Adviser at Continuum, said: “If buyers had to commit funds up front, along with a legal obligation to buy, this might initially slow the offers being submitted, but it would also mean only truly serious offers were being submitted. Also, it might stop ‘gazundering/gazumping’ which is very upsetting if you are on the wrong side of either practice.

“No system is perfect and such major changes would require a lot of examination into the details. However something needs to be done to bring some peace of mind for buyers and sellers, that once an offer is accepted, the sale will generally proceed, at the price agreed.

“It is not just the emotional cost that needs to be addressed but very real financial concerns. Delays can see buyers’ facing an increase in the cost of their mortgage as lenders change rates, as well as much-needed capital being tied up whilst the whole chain waits for the process to complete.

“New Prime Minister Andy Burnham has previously proposed reforms to the house buying system. Now could be the correct time to also address the wider problems in the English residential property buying system.”

Editors Notes – About Continuum

Continuum, headquartered in Plymouth, was established in 2014 by founding partner, Martin Brown, as a National IFA brand to offer a modern, new financial advice experience.

The business focuses on creating a three-way partnership between Continuum, the adviser and the client, in an environment where each party can only succeed and grow if the other parties also succeed and grow.

By educating customers through an award-winning financial education programme and offering our clients a loyalty programme, Continuum develops long-term relationships strongly endorsed though market leading Net Promoter Scores – most recent customer survey delivered a score of +90.

An in-house discretionary model portfolio service, My Continuum Wealth, was initiated in July 2021 to offer an exclusive MPS (Model Portfolio Service) to Continuum advisers.

Continuum now holds assets under influence in excess of £3.12 billion.

In December 2020 Continuum was awarded ESG kitemark (ESGmark) accreditation in recognition of its business approach of Environmental, Social Responsibility and Governance matters.

Continuum is a trading name of Continuum (Financial Services) LLP which is authorised and regulated by the Financial Conduct Authority. Continuum (Financial Services) LLP is a Limited Liability Partnership

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Katherine Mitchell    07917 855881        kmitchell@brandonconsultingservices.co.uk