Upfront & material info: is this HIPs in disguise?

There is mounting evidence to suggest the property industry is returning to greater disclosure of property information at the start of the marketing stage – ten years after the Conservative-Liberal Democrat coalition Government scrapped HIPs (Home Information Packs, also known as Seller’s Packs). Some experts are forecasting the introduction of HIPs-lite – a less aggressive but improved approach to greater transparency.

Currently, much of the critical information that determines whether a buyer makes an offer and for how much is confined to the survey and a document known as the TA6 property form. The latter is completed by the seller only after an offer has been accepted and once conveyancing has already started.

Although it is a legal obligation to disclose issues such as neighbourly disputes, flooding incidents and boundary wrangles within the TA6 form, the document often comes too late in the transaction – when money will have already been spent on conveyancing. Some revelations may leave the buyer with no option but to back out of the purchase and break the chain.

As a result, this year’s property buzz phrase is ‘upfront information’ and two announcements in 2022 have already indicated that buyers will have more information at their disposal before they make an offer.

Firstly, the National Trading Standards Estate and Letting Agency Team (NTSELAT) has set out a three-phase plan it hopes will result in the mandatory disclosure of more upfront information. Plan A stipulates that ‘material information’ – which is a property’s council tax band or rate and the property price and tenure information (for sales) – must be included on all property listings by the end of May 2022.

Onboard are the UK’s leading property portals, Rightmove, Zoopla and OnTheMarket, who will introduce corresponding data fields this spring. An estate agent will be prompted to input a property’s council tax band or rate, and the property price and tenure information, with consequences if they leave any field blank.

Withheld information will result in consumers being shown advice as to why the absent information is crucial when making home buying decisions, and pointing them in the right direction as to where they find the missing details.

Even more information would be disclosed upfront during NTSELAT’s Plan B. This would see publication of material information that must be established for all properties, applying mainly to utilities (and similar), where non-standard features would affect someone’s ability to make an informed judgement about a property.

Finally, Plan C relates to additional material information that may be applicable to an individual property, such as restrictive covenants and the risk of flooding. This would also have to be disclosed upfront.

Once the three phases have been rolled out, NTSELAT will seek to make material information mandatory and estate agents would be prohibited from uploading properties to portals if any details were missing. This echoes HIPs to a degree, as the pack was also compulsory in order for a property to be sold on the open market.

Despite the Auction industry being perceived differently, they put all information upfront and links to it can be seen on property particulars. The Private Treaty market continues to talk about upfront info but storing it is often overlooked and needs sorting via a platform agnostic dataroom. Now there is somewhere to store it, via Auction tech, called a PIP Vault – their CEO, Tim Main says “The agents we’re talking to have found their average sale time is reduced by two weeks – so making more info upfront available is clearly working for all.”

NTSELAT’s mandated changes could bring about change finally!

The Government’s new Levelling Up the United Kingdom White Paper also addressed the lack of information available to buyers in relation to aborted purchases and money spent on wasted conveyancing. It wants purchasers to have more upfront information to create a fairer, just and more cost-effective buying process.

Viewber’s founder and ex-estate agent, Ed Mead, has strong views on the matter of material information and you can listen to his thoughts in this vlog. The Viewber team will also be monitoring the situation and continue to provide any elements of a pack that might help.