The Introduction Of Material Information Guidance

What is Material Information?

‘Material Information’ is defined in the Consumer Protection Regulations as information which the average consumer needs according to the context, to take an informed transactional decision.

In 2022, the National Trading Standards (Estate and Letting Agency Team) began releasing new guidance on how estate agents should acquire and present information to potential buyers of a residential property they are selling to avoid misrepresentation.

The guidance is designed to bring clarity and consistency to how a property is marketed, ultimately ensuring that buyers have available at an early stage, all information that may impact their decision to purchase a property. Buying a property is of course a huge decision with many complex aspects, it is therefore key that both positive and negative information about a property is available, as it could impact a buyer’s decision to proceed with the purchase at all.

What is the guidance?

This guidance consists of three parts, A, B and C.

Part A was released in early 2022 and was required on listings later that year.

It details non-optional financial information, which would have a direct effect on the buyer. This includes costs such as the asking price, tenure of the property (e.g. freehold or leasehold), council tax band, term- remaining on a lease, ground rent and service charge amounts.

This information is crucial for potential buyers and arguably even more applicable with the current cost of living crisis. Being able to budget for regular unavoidable expenditures could be the difference between being able to afford a particular property or not.

As this guidance came out two years ago, it is visible on many property listings.

Parts B and C were published in November 2023, and it is anticipated that the same approach will follow. As all three parts have now been released there is a useful checklist that estate agents can use to establish the information for marketing the property.

Part B comprises information about the characteristics of the property, and includes:

• Physical characteristics of the property (terraced, detached etc and material type)
• Number and type of rooms (and sizes of rooms)
• Utilities information: electricity and water supply, sewerage and heating arrangements, broadband type, mobile signal/coverage
• Parking (driveway, garage, street parking, permit etc or none)
  • Also if this forms a part of the service charge or there is a separate cost

Part C contains details that affect the enjoyment of the property, such as:

• Building Safety (e.g. structural issues, unsafe cladding, insufficient alarm systems)
  • The following should then be provided about the defect: what work has already been done or what work needs to be done, potential costings and will it affect the buyer’s ability to reside in the property
• Restrictions and rights
  • Including conservation areas, tree preservation orders, listed building status, restriction on permitted development, restrictive covenants and rights of way
  • Common restrictions such as sub-letting, running a business from or renting the property as a holiday home
• Flood and coastal erosion risk
  • Has the property been flooded recently and what is the source, have any adaptations been made to the property
• Planning permission and proposals for development
• Property accessibility and adaptations
• Coalfield or mining area

How will the new material information guidance benefit agents and homebuyers?

The guidance will of course assist estate agents in meeting their own obligations, up until now, there has not been a definitive list of what should be included. Aside from this, as is widely reported, delays are a cause for concern for those moving home and it seems, part of those delays are caused by the need to gather information – the raising of enquiries throughout the transaction.

Previously, information gathering has been delayed until the buyer’s offer is accepted, at which point, the transaction has already started. Would it not be beneficial to instruct the seller’s conveyancer at the point of property listing? The conveyancer can assist the agent with obtaining the information and put together a more detailed contract pack, hopefully reducing the need for the constant back and forth of additional enquiries.

It has the potential to really benefit the conveyancing process, but it will require buy in from both agents and consumers to consider instructing the conveyancer at the point of the property listing. Only then will we potentially see the efficiency gains in the conveyancing process.

If you are thinking of selling your property, consider instructing your conveyancer at the same time as your estate agent. They can work together to produce the relevant information, deal with any potential issues, and get your transaction off to the best possible start.

Ask us today about the “Up-front Information Process” and how we can get you off to the best start when selling your home.