While the upcoming major changes in upfront information are “long overdue” and can be traced back to objectives nearly 15 years old, the proposed developments are far from perfect – there are questions about enforcement and efficacy, and some may “struggle to adapt”, according to a top property lawyer from Irwin Mitchell.
National Trading Standards announced this week that, by the end of May, all property listings will need to contain the property’s council tax band or rate and the property price and tenure information (for sales) in a new effort to improve the availability of upfront information in the conveyancing process. The move is generally welcomed within the industry by both conveyancers and estate agents.
The government’s Levelling Up White Paper spoke of “ensuring the critical material information buyers need to know…is available digitally wherever possible from trusted and authenticated sources, and provided only once”. This week’s announcement is a clear step towards such a goal.
Data fields for the aforementioned information will start to appear on portals over the coming weeks. Part A of this three-phase project includes information that is considered material for all properties. A further two phases are being developed, which will incorporate further material information such as restrictive covenants, flood risk and other specific factors that may impact certain properties.
As new data fields for tenure, price and council tax are added to portals, if they are left empty by an agent, this will be flagged on the listing so consumers can see what information is missing. This will link to advice on why that information is important and how it may be obtained.
National Trading Standards wants all material information to be mandatory on property listings once all three phases of the project are complete. At that stage, agents will need to include all the required information before it is listed on a property portal.
The Competition and Markets Authority (CMA) has also been working to improve how the leasehold market works for consumers. It is investigating, and has taken action against, potential breaches of consumer protection law in the leasehold housing market, including unfair contract terms in leases as well as broader allegations of mis-selling of leasehold property. Simon Jones, Director of Consumer Protection, CMA, said: “It is important that people are fully aware of the annual costs of owning a home before they buy.”
Jeremy Raj, Head of Residential Property at Irwin Mitchell, commented on these two initiatives:
“The origins of this announcement can be traced back to the Consumer Protection legislation of 2008, so many will be of the view that it is long overdue. The more alert parts of the industry have known this was coming for some time, but it is fair to say that some parts of the industry will struggle to adapt, and we are looking at a significant shift in the home buying and selling process.
Many people will be surprised that it is only now being made clear that relatively basic ‘material’ information regarding a property must be provided up front. The truth is that, until now, most people making an offer on a house or flat have been woefully uninformed and had to hope that the conveyancing/survey process would not reveal anything that would cause them to change their minds about whether to proceed – or whether the price they offered was correct. The potential for wasted time, money, and emotional cost has been a flaw in the system since inception.”
Raj continued:
“This first step will go some way towards redressing that flaw, although some problems will remain, and the position will still be that neither buyer nor seller will be bound to proceed until contracts have been exchanged. It also remains to be seen how much of the upfront information in the second and third phases the public will actually want to see or be able to evaluate themselves. Agents and conveyancers will need to take real care when supplying or explaining the information.
Many in the industry will be scrambling to get themselves up to speed with the new requirements, which in the second and third phases will become quite onerous and will involve a dramatic change in the timing of information gathering and presentation. Another question is how widely this will be policed, and to what extent – enforcement by way of unlimited fines and a prison sentence of up to two years are likely to sharpen peoples’ focus and compliance rather quickly.”
Despite this suggestion that the new rules may take some getting used to, there is undoubtedly a feeling from both conveyancers and agents that the changes will increase consumer confidence and aid in raising the standards within the industry. Paul Offley, Compliance Officer at The Guild of Property Professionals, said:
“I would suspect that all the information required under phase A is already known by the estate agent at the point of instruction so making this information available within the property listing, allows the consumer to be aware and to make an informed choice on their next ‘transactional move’; whether this is to book a viewing or make an offer.”
We will be working with Members of The Guild of Property Professionals and licensees within the Fine and Country network in supporting implementation of this first phase. The timing of the announcement is perfect for our networks, as we will to add this new information to the topics that will be discussed at the forthcoming conferences for both networks.”
