Significant shift in the residential property deals process
Jeremy Raj of Irwin Mitchell gives his views, following the announcement of a significant shift in information in residential property deals.
National Trading Standards has announced that, by the end of May 2022, 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.
Data fields for the information will start to appear on portals over the coming weeks.
In a move generally welcomed by the industry, the announcement is in line with the government’s Levelling Up White Paper which 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”.
The changes represent the first phase of a three-phase project by the National Trading Standards Estate and Letting Agency Team (NTSELAT), in partnership with industry leaders and the UK’s major property portal- and define what constitutes material information for property listings.
Two further 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 the new data fields for tenure, price and council tax are added to portals, those left empty by an agent will be flagged on the listing so that consumers can see what 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.
In addition to the announcement by the NTS, The Competition and Markets Authority (CMA) has also been working to improve how the leasehold market works for consumers. It is investigating and has acted 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.
The CMA has also stressed the importance of people being fully aware of the annual costs of owning a home before they buy, and that clearer upfront information is needed when properties are sold.
Jeremy Raj, Head of Residential Property at Irwin Mitchell, commented on these two initiatives, saying:
“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 wouldn’t 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.
“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 up-front 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.”
Jeremy Raj continued:
“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.”
Kindly shared by Irwin Mitchell
Main photo courtesy of Pixabay
