By James Phelps, Solicitor, Penman Sedgwick LLP
The government is poised to introduce a system allowing homebuyers to be provided with a greater degree of ‘critical information’ at an early stage when looking for a new property.
These plans were outlined within the government’s 332-page ‘Levelling Up’ white paper and could potentially become a legal requirement backed up by legislation. In the document the government has declared its intention to support more people onto the housing ladder by encouraging the take-up of more commonhold flats as an attractive alternative form of property ownership and has unveiled a Commonhold Council to prepare the market accordingly.
The purpose of this initiative is to reduce the number of abortive property transactions and to make the process less daunting for first-time buyers. In particular, it is designed to ensure that the government and the industry work closely together to improve what can be the expensive, time-consuming and stressful process of buying and selling property.
Often likened to ‘Home Information Packs’ (HIPs), information likely to be highlighted early on could include:
- Whether the property is leasehold or freehold
- The length of the lease (where applicable)
- Service charge details
This information is intended to be readily accessible at the point of marketing a property and available digitally. This is to be made available to all stakeholders reducing the need for duplication of tasks.
A range of technological platforms are to be employed, all designed to encourage the capturing of information from apps populating the protocol forms through to the development of property logbooks.
Currently approximately a third of all housing transactions fall through in England and Wales costing potential buyers hundreds of pounds. A similar initiative is already in place in Scotland where only one in ten transactions fall through.
Steps have already been taken by representative bodies and practitioner groups to provide more upfront information. Last year, for example, the Law Society began testing a new transaction form (TA6 Part 1) to ensure more information is available at the point of listing. This should enable estate agents to inform potential buyers at a much earlier stage of crucial information that could influence a purchasing decision.
Furthermore, the Home Buying & Selling Group already introduced Buying & Selling Property Information (BASPI) in 2021 to collate data designed to be a single ‘source of truth’ in providing upfront information about a property.
Launched in 2007 and abandoned in 2010, Home Information Packs (HIPs) are broadly regarded as a good idea poorly executed. This time around, rather than relying on market forces to determine whether or not the new initiative proceeds the government has pledged to use legislation to ensure action is taken sooner rather than later.
If you are looking for legal advice, we can help. Email jphelps@penmansedgwick.com or call 01923 225 212