Home sellers must disclose ‘nasty surprises’ to stop deals falling through

News at John Hoole | 01/12/2023

Home sellers (What's your home worth?) will have to confess to having bad phone signal and say if their neighbours are planning an extension as part of new rules to stop property deals falling through

National Trading Standards has told estate agents more details need to be included in property listings and disclosed upfront at viewings in order to avoid buyers discovering “nasty surprises” midway through transactions, which can collapse deal chains.

It is hoped the changes will also save would-be buyers losing money on wasted home-buyer surveys and legal fees. 

If disclosures are not made, this could breach the law – which states it is an offence to omit information which could impact the decision of the average consumer. Failing to comply could also trigger a complaint against the agent, and lead to them having to pay out redress.

Listings will also need to include any known planning permission or proposals for development in the property’s “immediate locality” – the watchdog uses the example of where a green field opposite a property is planned to be developed.

Other disclosure requirements include more information on the energy supply, flooding risks, sewerage arrangements and the exact material makeup of the property. 

Listings should also include “an accurate description or statement as to the nature of the mobile signal and coverage available at the property, including any known issues or restrictions”, the guidance says. 

If a building has unsafe cladding, estate agents have been told to warn prospective buyers that there may be “considerable costs” of repair or remediation, which can sometimes be in the “thousands or tens of thousands of pounds”.

The proportion of property sales falling through hit one of the highest rates since the financial crisis last year – jumping to a high of 25.4pc in November 2022.

In the weeks after the mini-Budget, when mortgage rates shot up, fall-throughs surged as nervous buyers pulled out of transactions. Fall-through volumes have since recovered to pre-pandemic levels.

James Munro, of National Trading Standards, said the new guidance was intended to “create consistency and raise standards across the board”.

He added: “Too many consumers suffer emotionally and financially because important information crops up late in the process and the transaction falls through.

“I am confident the process of change will be smooth and that the benefits – faster transactions, fewer complaints and fall-throughs and ultimately, greater consumer trust – will be quickly felt.”

Mr Munro said his team will be monitoring property portals such as Right Move, Zoopla and On The Market over the next 12 months to see if the guidance is taken onboard.

Michael Lawson, of Hive Estates in Newcastle, said as an unregulated industry some agents have been able to get away with bad pictures and vague descriptions of properties listed for sale. 

He said: “This will do what it says on the tin – raise standards. It’s very easy to win an instruction and put a property on the market. But we need to be getting these details from the client when we first meet them too.”

John Hoole Estate Agents - Covering Brighton and Hove - source The Telegraph  MONEY REPORTER -