New guidance for material information in property listing

Jeremy Raj, Head of Residential Property at Irwin Mitchell, explains what the new guidance for material information in property listing means in practice.

The National Trading Standards Estate and Letting Agency Team (NTSELAT) have now released new guidance for Material Information in Property Lists for both sales and lettings.

The guides are effective immediately. The NTSELAT has stated that the guidance is intended to support agents with existing requirements under the current consumer protection regulations and so would be inappropriate to have a commencement date.

Estate and letting agents are encouraged to follow guidance as soon as possible, although it is recognised that there will be an implementation period. Eventually, it is envisaged, that failure to provide the minimum information will prevent a property from being listed on property portals.

The move from NTSELAT has been much anticipated. The Consumer Protection from Unfair Trading Regulations 2008 was previously criticized for failing to provide a comprehensive understanding of what amounted to ‘material information’ which needed to be included for consumers when a property is listed.

The NTSELAT sought to address this through their guidance. It further promotes the Government’s objective to improve the home buying and selling process by ensuring buyers have information available to them before even viewing a property and bringing forwards information which may later affect their decision to purchase the property. Making this information available to the buyer early on is hoped to reduce the number of failed transactions and speed up the conveyancing transaction.

The release of the guidance has come in two phases. The first (part A), approximately 18 months ago, required property listings to include the price, council tax band and details of the tenure. This was not a substantial change, and most agents already included this information.

Since then, there has been further guidance, for example, by removing ‘price on application’ listings. However, the new guides represent a more fundamental change which will significantly alter the conveyancing process.

Along with part A, the new guide has two further sections (Parts B and C). Part B is information which is likely to be in the knowledge of the seller or within their abilities to obtain. These include details of utility supplies, heating, and parking. Part C will require specialist advice from a conveyancer.

Although the requirement is only to disclose this information when the property is affected by the issue in question, only a conveyancer will be able to make that assessment. If a seller makes no comment on a particular issue, it may be assumed to have made an investigation and the property is not so affected.

This change will mean it will soon become best practice for a seller to engage a conveyancer before the property is put on the market. It may also mean that sellers may have to adjust their expectations as to how quickly a property can be advertised or viewing commenced.

They will also face additional costs, but, in theory, this should ensure a smoother and faster transaction once a buyer has been found.

The details required by Part C include whether the property is in a conservation area or a listed building or subject to a tree preservation order. Details of restrictive covenants, rights, planning permission, restrictions on subletting and use of the property (such as running a business or using it as a holiday let) and in the case of leasehold properties, covenants and restrictions arising from the lease.

An environmental and a local land charges search will need to be completed so that details of flood risk, costal erosion, coalfield mining and relevant planning permission can be added to the listing. The seller will also have to include whether the property has been adapted and is suitable for those accessibility needs.

So, what do we make of this?

I believe we are now finding ourselves at a turning point for our conveyancing system. The goals of assisting home buyers in making informed decisions early and avoiding wasted costs are highly commendable. However, consumers themselves have frequently been reluctant to focus on the details once they have found their dream home – as every conveyancer knows.

Agents have shown minimal signs of adopting or embracing this change to date, highlighting perhaps the continued need for better regulation and a more joined up approach. Shifting the timing of when information is provided, and who collates it, is a task that should not be underestimated by those pushing for the change.

Public buy-in, education and a significant mainstream media campaign will be needed to make this work. Whether it will hit the rocks of intransigence and resistance to change in the same way that HIPs did many years ago or turn into a commercial opportunity for technology companies and savvy conveyancers, is also not clear.

What is clear is that the clarification from NTSELAT as to what constitutes material information and their stated intention to enforce in due course means that the process of buying and selling homes should not be thought of in the same way in 2024 as it has been to date.

Although the NTSELAT have taken their time and consulted with agents, conveyancers, surveyors and representatives of consumer groups, a potential criticism is that without enforcement and regulation of agents there will be no change and it will down to the property portals to mandate to the extent they wish to do so.

In the meantime, conscientious agents and other property professionals will be looking at how this change will impact their processes and how they can collaborate between themselves to provide the best service to sellers.

For more information on this new change, please listen to this podcast hosted by Irwin Mitchell Head of Residential Property, Jeremy Raj with Emma Cooke, National Trading Standards Estate & Letting Agency (NTSELAT) Policy and Information Manager (whose team brought the regs in) and as Kate Faulkner OBE who is chair of the home buying and selling group.