MPs have called for sweeping reforms of the “painful” homebuying process, including making contracts binding at an earlier stage and providing more upfront information about properties.

The Housing Select Committee has called for the legal overhaul in order to prevent estimated losses of £1.5bn per year from property sales falling through.

In a letter to the housing minister Matthew Pennycook last week, responding to the government’s consultation on the issue, the committee’s chair Florence Eshalomi called the current homebuying process “a painful experience”.

She said it “reduces motivation to move and slows down the housing market” and creates unnecessary costs for buyers, sellers and other stakeholders.

Following its enquiry, MPs on the select committee concluded that the government “must make property transactions more binding at an earlier stage by means of conditional contracts, such that both parties are legally bound to a transaction once certain conditions are met”.

Failure to follow through on transactions once the conditions are met should lead to financial penalties, they said.

The MPs also called on the government to investigate further ways of reducing the time between offer and completion.

Other recommendations include a code of practice and mandatory qualifications for different types of property professionals.

Eshalomi said: “The current homebuying and selling process in England and Wales is far more difficult, stressful, and gruelling than it should be.

“The path to homeownership is littered with delays and collapsed transactions due to gazumping and broken chains.

“In addition to the personal impact involved in each case, these hurdles only serve to exacerbate the affordability crisis and make getting on the housing ladder more challenging.”