On 11th October, Sir Bill Wiggin MP, Member of Parliament for North Herefordshire, presented a Ten-Minute Rule Bill to the House entitled “Sale of Property (Sealed Bids) Bill”. The purpose of the Bill is to prohibit the sale of property by secret sealed bids and to make property transactions more transparent.
Currently when a property, including farmland, is sold by sealed bid, the sale is made through a secret ballot. Potential buyers can be invited to submit a best and final offer for the property without knowing what the other interested parties are bidding, leaving them without the opportunity to increase their offer.
It is then left to the owner of the property and the estate agent to decide behind closed doors who will be declared the ‘winner’.
Sir Bill Wiggin MP described this process as “unclear and opaque”.
Currently agents are not subject to any legislation that requires transparency when handling the bids.
As Sir Bill emphasised, this lack of regulation and transparency over sale of property by sealed bids has unfortunately tainted the reputation of Estate Agents who are by-and-large good, honest people.
At a time when we want to encourage more people to own their own homes, this practice artificially inflates the housing market and makes it needlessly difficult and expensive for people to get on the property ladder.
Not only do sealed bids affect house-buyers, this covert practice also affects farmers.
In Herefordshire, the average price of prime arable land is £10,670. Agricultural land values in England have reached their highest level since 2016, and in that time we have also witnessed an increase in the use of sealed bids for the sale of farmland.
In his speech, Sir Bill highlighted that farmers are the most exploited by the sale of land by sealed bids, since the “the land next door is always more valuable to the local farmer than to someone living further away.”
This extra cost can in turn puts pressure on the price of food and discourages young aspiring farmers from buying land where the sealed-bids process is used.
The proposed Sale of Property (Sealed Bids) Bill will ensure that this unfair and secretive practice no longer takes place and will instead encourage a far more transparent purchasing market for all.
The Ten-Minute Rule Motion passed and will be read a second time on 24th March 2023.
