The government is keen to reduce the wasted costs and disappointment that results from withdrawn offers, gazumping (where the seller accepts an alternative higher offer) and gazundering (where the buyer reduces the offer at the last minute).
A three-month trial of reservation agreements will soon begin with two estate agents in yet to be announced areas of the country. The reservation agreement will include provisions that if either side pulls out without good reason they will lose their reservation deposit. The size of this deposit is yet to be established but something in the order of £500-£1000 has been suggested. This deposit will then compensate the party for their wasted costs in the event that the other party withdraws. The agreement will also need to incorporate the grounds on which either party can withdraw without penalty and these will probably include: changes in circumstances, unacceptable lease terms, adverse survey and title defects.
