In depth: MPs hear pleas to mandate upfront information in house sales

Upfront information dominated the House of Commons levelling up, housing and communities select committee’s opening evidence session this week as part of a home buying and selling inquiry. 

The message from industry bodies called to give evidence: upfront information will improve the process, reduce fall-throughs and the government should mandate it.

Beth Rudolf, director of delivery at the Conveyancing Association, explained: ‘If you get a seller instructing on a property that they’re putting on the market, before they find a buyer if you say “fill in these forms” they’re absolutely all over it because they know their house is going to sell tomorrow and they just want to get it through… but if, once you’ve got a buyer who has put forward an offer and the seller’s accepted it, and then you say to the seller “provide us with information that might put your buyer off, that might cause the transaction to fall through”, they’re either going to be very much slower in providing this information, which is what we find, or they might just twist some of it and say “I don’t know”, and then it’s up to the buyer to discover that. And that then comes much later in the transaction, so you get people pulling out, and the huge cost to all of the industry and to the consumer of waste.’

Mandating upfront information would ‘revolutionise’ the home buying and selling process, Kate Faulkner, co-chair of the Home Buying and Selling Group, said. ‘Material information’ required by National Trading Standards for property listings has provided a good start to that revolution.

While the ‘material information’ comprises around 15 pieces of information, the Home Buying and Selling Group has identified up to 300 pieces of ‘upfront information’ that the buyer and other parties may need to know before an offer is agreed.

‘If we can crack these 15 pieces of material information, if we can learn how to share and have that information trusted up and down the chain, delivering 300 pieces of information when required is a lot easier,’ Faulkner said.

Upfront information would shift burdens on to the seller, the committee noted.

Maria Harris, chair of the Open Property Data Association, pointed out that most people selling a house are also buying a house. ‘All we’re doing is changing the point... and moving it to the beginning, but giving them the certainty that the transaction is much more likely to go ahead, they will have more transparency but more control over the time frame and how long that relay [race] takes, which enables their buying process to also be smoother. At the moment, those things are just so out of sync with each other. Asking the seller to do upfront is actually the right place to have it.’

For reservation agreements (locking in the buyer and seller to a transaction) to become widespread, upfront information is crucial.

Harris said: ‘Why would you put a reservation agreement on something today when you don’t have the full information about the property? You don’t know what’s in the searches. Nobody’s checked the title or the deed. You don’t even know if that property can get a mortgage. You don’t know if it’s insurable. Why would you put a reservation on something like that today when you’ve got no idea what you’re actually buying? So, unless we fix having the right information upfront, the reservation agreement is not something you would ever use.’

Another issue raised by the committee: referral fees.

Rudolf said some Conveyancing Association members would point out that if you have referral fees, you have service-level agreements with referral panel managers. Knowing how much work they will get in, conveyancers will feel able to invest in, for instance, technology that can improve the process for the consumer. Other Conveyancing Association members would call for referral fees to be capped.

‘I don’t think anybody would say “ban referral fees”, because then it would go back to what it was before they were allowed, which was manilla envelopes being passed under the table, and holidays being paid for, and all sorts of bad behaviour,’ Rudolf said.

The way forward? ‘Regulation is key,’ Rudolf said.

The next evidence session is expected to take place next month. With upfront information a divisive topic within the residential property sector, many Gazette readers will want to see frontline conveyancers on the witness list.

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