iamproperty and partners Tech Talk: Property experts explain material information shake-up
Next month will see new rules around upfront property information come into force in the UK in what will be a shake-up for the property industry. First published in February of this year, ‘Improving the Disclosure of Material Information in Property Listings’ will take effect at the end of May, outlining the key information that should be displayed by agents to give buyers enough information to make informed decisions.
Ahead of the introduction of the new rules, iamproperty Managing Director, Ben Ridgway, led a discussion around what upfront Material Information means for agents, buyers and sellers and the UK property market, joined by Beth Rudolf, Director of Delivery at the Conveyancing Association and Deputy Chair of Homebuying and Selling Group, Emma Cooke, Policy and Information Manager at National Trading Standards Estate and Letting Agency Team (NTSELAT) and Paul Offley, Compliance Officer at Nurtur Group.
Why is upfront Material Information important?
For Paul, upfront Material Information is important for two reasons: “It will help reduce fall-throughs and will help speed up that time between the offer being accepted and sale agreed.”
Paul explained: “The more Material Information you can give a buyer right at the start of a transaction, the more chance they’ll have all of the information they need to make an informed decision on whether they wish to proceed.”
Paul stressed that the concept of providing upfront Material Information isn’t new: “When we first started, you did put a lot of Material Information [upfront]. This isn’t anything new, it’s just revisiting what we used to do and enhancing that for the benefit of the consumer - and I think it is the consumers that are going to benefit from this.”
Beth agreed that consumers should be the focus: “At the Conveyancing Association and the Homebuying and Selling Group we put out surveys. 98% thought that upfront information was a good idea - and were even happy to pay for it. I think that tells us everything we need to know: the consumer is absolutely behind it.”
For Emma, building trust for consumers is a vital part of the new rules: “In the survey NTSELAT conducted, 54% of consumers said that they would be less likely to buy or rent a property if it was missing information, and 90% of the consumers that we asked said they wanted detailed key information in listings.
“We cannot forget that consumers need to trust their agent - there’s a massive element of trust – [as long as] agents don’t forget that, they’re onto a good thing.”
It also spells a new era for Estate Agents, according to Ben: “At the very least, fall-through rates should reduce with better Material Information. An industry average that has over 30% of properties falling through - it’s just crazy to think about all the wasted time and resource.” For Ben, upfront Material Information has the potential to boost property pipelines significantly, “which is just going to drop straight on to the bottom line for agents.”
How has upfront Material Information worked elsewhere?
Beth explained: “When I wrote the whitepaper on improving the home moving process back in 2017, I did a lot of research in jurisdictions where they get it right. Look at Australia: they have so few fall-throughs in their vendor disclosure stage - they probably have about 2% of transactions that don’t go ahead.
“That’s with a legal commitment within the offer. When you go to view the property, [there must] be all the contract terms - this means when they put an offer forward it’s binding (with a cooling off period). Completion still takes place weeks later, but those weeks are very different [to the UK]: they can make plans to get kids into school, book holidays, organise removals, everything doesn’t go on hold.”
Looking closer to home, she added: “Denmark and Norway also have upfront information in place, and they have really low fall-through rates. And of course, Scotland. Fall-throughs in Scotland are now 11% - they don’t provide searches – and their transaction times are consistently 4 weeks faster than ours.”
So can the UK follow suit? “It’s all about communication,” Emma explained, “It’s all about involving stakeholders earlier in the process: shaking up the order in which you do things. When people start to get used to it, it will become common practice.”
How can technology solutions support agents with upfront Material Information?
“More and more agents are starting to look at digital solutions and how they can help them,” said Paul. “As well, I think what the agent will try and do is make it as easy as they can for their seller. The seller’s probably going to have to provide this information at a later date anyway, so why can’t we look at one solution where they can provide it all at the start of that transaction?
“I also think we need to make it as easy as possible for people to complete forms, digitally or otherwise. Once we start to educate both sellers and buyers, we can find new working ways to gather that information from technology sources.”
For Ben, “It’s not one size fits all. There’s lots of solutions out there that make life easier. Through our movebutler platform, we’re now supporting over 1,000 estate agency branches to onboard their clients from an AML perspective, and we’re about to launch our material facts module, which will help agents comply with parts A, B and C.”
Beth added: “We created Buying and Selling Property Information (BASPI) to capture all the information upfront. Certainly with Part A, 30% of that could be prepopulated by authority data – so it does not have to be tricky. Also, deploying AI through technology means that the consumer only has to answer questions that are relevant to the property.”
How can we educate buyers and sellers about the new rules?
For Paul, it is “just about keeping them informed, and educating them about the benefits.” He continued: “I don’t think it’s a case of just saying ‘this is what’s going to happen’, it’s expressing why it’s happening and how it’s going to benefit them. Nobody wants to be filling out forms for the sake of it, they’ve got to see the value.
“Once the seller knows that this is going to help them – speed up the process, save time and increase chance of sales going through - and the buyer can see that this can help them to make an informed choice, it should become best practice. It’s down to the agents to sell that, and it’s how they engage with their clients. [Agents need to] talk about it, sell the benefits, let everybody know how it impacts them.”
Emma confirmed that National Trading Standards is set to publish guidance for all stakeholders: “We’re working on it at the moment, we’ve got a working group for consumer education as well as industry, we’re hoping to set this out and make it public as soon as possible - by the end of spring if not before.”
To learn more about what the upfront property information rules will mean for consumers and property professionals, watch iamproperty’s Tech Talk webinar in full here.