The government is looking to trial reservation agreements in the hope that it will speed up transactions, and ensure that all parties are more committed. On entering into a reservation agreement, the parties will put down money pending the completion of the transaction. Could this lead to faster transactions and less stress? There are concerns that the opposite is more likely.
Reservation agreements would add an extra layer to transactions, resulting in risks such as an innocent party losing money due to failure elsewhere in the chain, or the agreement being amended to the point of irrelevancy. With these concerns in mind, however, considering how to streamline conveyancing transactions is still a positive step.
Buyers and sellers would be asked to put down some money to enter into the agreement. They would get some money back if the purchase doesn't happen. Acceptable reasons for pulling out could include a bereavement, job loss, inability to get a mortgage or if the property is unmortgagable.