UK to introduce property sale fines to curb £1.5bn gazundering cost
The UK government plans to introduce legally binding property agreements and fines to halt last-minute price reductions that cost the economy £1.5bn a year, though industry groups want the 2029 timeline accelerated.
The UK Ministry for Housing, Communities and Local Government is moving to stop gazundering—the practice of buyers lowering their agreed offer just before contracts are exchanged—by introducing legally binding agreements with fines for buyers who walk away without valid reasons.
The current system, where offers in England and Wales are not legally binding until exchange, creates significant market friction. It takes an average of 120 days to complete a sale, and one in three transactions fall through before exchange. According to the Ministry, this failure rate costs sellers £400m and the wider economy £1.5bn annually.
While still relatively rare, the practice is growing as the property market shifts in favor of buyers. "It's not actually that big, it doesn't happen very often [but] it's started increasing though because of the change in the property market that's made it a buyers' market," says Beth Rudolf from the Conveyancing Association. An excess of housing supply compared to buyer demand is forcing sellers into vulnerable negotiating positions.
For individual sellers, a collapsed chain triggers immediate financial penalties. Sellers who lose a buyer face paying duplicate legal fees to start over, as well as forfeiting prepaid removal costs. This localized financial distress aggregates into the broader macroeconomic drag calculated by the government.
Under current legislative timelines, the government's proposed reforms will not take effect until the end of the current parliament in 2029. The Conveyancing Association is urging the government to implement the changes "without delay," arguing that the prolonged timeline leaves the market exposed to continued inefficiencies.
The government estimates its reforms will cut the average transaction time by four weeks and save the average first-time buyer £650. In the interim, market professionals recommend reservation agreements, which impose financial penalties on either party that pulls out, or conditional binding offers to secure financing and chain requirements ahead of formal exchange.
