Estate agents have questioned the effectiveness of reservation agreements in reducing failed property transactions, stating they are unlikely to work unless made mandatory by the government. The government today published research into attitudes towards these agreements, following a Call for Evidence launched in 2017.
The 51-page report highlights industry scepticism, particularly among estate agents, regarding voluntary agreements. Agents argued that such agreements could have limited impact within property chains if other transactions lacked the same commitment. They also pointed to the low take-up of existing commercial reservation agreement products.
The research also raised questions about incentives within estate agency, noting that agents are often incentivised by properties sold subject to contract rather than completed sales. While consumers saw potential benefits, such as encouraging buyers to think more carefully and increasing commitment, they questioned whether reservation agreements would prevent gazumping.