I beg to move,
That leave be given to bring in a Bill to prevent gazumping in connection with buying and selling homes.
The disgraceful practice of gazumping has been raised in the House on several occasions over the years, notably by my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle). It has also been the object of attention by the Law Commission and, from time to time, by the legal profession's magazines and the press. A remarkable number of right hon. and hon. Members have shared with me the experiences of their constituents, and I have been helped by them.
The word "gazump" is based on "gazoomph," which is a graphic Yiddish word meaning to swindle or to cheat. It applies when the purchaser and the vendor of a home have agreed on a definite price and then, before contracts are exchanged, the vendor raises the price to that purchaser or sells at a higher price to someone else. It does not apply to the converse case of the purchaser withdrawing before exchange of contracts. That is a nuisance and the breaking of an agreement, but it is not gazumping. I have some ideas on that, too, but I have only 10 minutes in which to speak, so they must be developed at another time.
Gazumping has been described as a method of parting rich men from their money—and it certainly does that. The greater problem is that it also parts the relatively less well off from theirs, especially young people and first-time buyers.
Scottish law and practice is far nearer to what I would like to see happen in England and Wales. It has been said that nothing stops us operating the same system. That may theoretically be true, but it will never happen without legislation.
First, my main aim it to give 14 days to a purchaser to exchange after the price has been agreed. During those 14 days, if the vendor backs out, the vendor would have to pay the purchaser 5 per cent. of the agreed price, plus any specific and reasonable costs incurred by the purchaser during that time. Any sum less than 5 per cent. would not be a deterrent, because gazumping is in multiples of thousands of pounds these days, even on less expensive property. Therefore, as in Scotland, the price would be fixed at the outset. In England and Wales exchange would follow in a short time and certainly would exist at an earlier stage. The parties could then agree either a long or short period for completion, depending significantly on the need for the purchaser to sell his or her home in the meantime.
Secondly, considerations of time would be more important. My Bill would promote a speeding up of the all too ponderous and needlessly mystifying processes of conveyancing. For all the welcome increases in home ownership in recent years, in many respects we are still in the age of the quill pen when it comes to law and practice. Solicitors, in particular, must grow more used to the idea that they are in a commercial world. Their negative attitude to advertising is revealing. The advent of licensed conveyancers has helped to bring the profession face to face with commercial reality. Many have recognised and seized the opportunities to co-operate with or to operate property shops, but more needs to be done.
Thirdly, home purchase would be helped by insisting on more, and more accurate, information in the agents' particulars. That is a subject in itself. I have seen particulars offering me
a modern system of central hating",
"gilt" spelt "guilt" and even
rent and rat free accommodation".
Fourthly, the vendor would be required to provide far more information to a purchaser when he puts his property on the market. He would be required to provide a survey from a surveyor with proper professional qualifications. No honest vendor should object to that. If the purchaser wished to be more thorough, he could obtain a further survey on his own. At the same time, the vendor would also be required to provide the usual standard searches and inquiries.
Local authorities should be able to produce all the relevant information quickly and efficiently. This week, Portsmouth city council is pioneering a new computer system, as too is Wigan. The system will be part of a national network, where solicitors, estate agents, banks and others will be able to obtain direct answers to the usual searches and inquiries. One third of Portsmouth property is now held on computer, and the aim is for complete coverage by the end of 1989. We have tolerated for far too long too many expectations of delay in what ought to be a quick and simple process.
I understand that the current ministerial response is that law reform should stay out of this area, that the remedy lies in the hands of those involved in house buying rather than in the law, and that there is nothing to stop people in England and Wales using the Scottish system if they want to. The trouble with that line is that it is far too complacent. Unless we have legislation, ordinary house buyers will never be able to bring about any significant change in the practices and customs of professionals, just as they could not tackle the scandal of the conveyancing monopoly without legislative help.
All that is lacking is the political will to legislate. I hope that my effort today, added to those of many others of all parties, will have its effect. My system is not perfect, but it would make things better. That is no more or less than most legislation can hope to achieve.
A gazumper is a swindler, a cheat and a racketeer. The present state of the law and practice allows him or her to operate without sanction of any kind and regardless of the damage caused to innocent parties. That is neither ethical nor just. It cannot be right. My Bill would provide some redress. I commend its introduction to the House.