Under the Consumer Protection Regulations (CPRs), agents were obliged not to omit any material information when listing a property for sale or rent. Although material information is any information that is important in helping an average consumer make a decision about a property, until this guidance, there hadn’t been a defined list of the basic information required.
This has now been clarified, with the defined list as below:
Part A: Information that, regardless of outcome, is always considered material for all properties regardless of location.
- Council tax/domestic rates
- Rent/asking price
- Deposits/tenure
Part B: Information that must be established for all properties.
- Property type
- Property construction
- Number and types of room
- Electricity supply
- Water supply
- Sewerage
- Heating
- Broadband
- Mobile signal/coverage
- Parking
Part C: Information that may or may not need to be established, depending on whether the property is affected or impacted by the issue in question.
- Building safety
- Restrictions
- Rights and easements
- Flood risk
- Coastal erosion risk
- Planning permission
- Accessibility/adaptations
- Coalfield or mining area
Part B information, such as who supplies the broadband and how good the mobile coverage is, does not include items of information we have been using to seeing upfront when a property is listed. Interestingly, although breaches of trading standards are law and subject to enforcement, many estate and letting agents are still unaware of the extent of data required to be put together before listing the property.
National Trading Standards may take a more generous stance for the time being as knowledge of this guidance becomes more widespread, but this grace will not last forever.
How this impacts the mortgage process
Companies like Moverly have entered the market to create these packs on behalf of agents and their customers. But why is this of interest to mortgage advisers?
To understand the direction of the market, you also need to understand what is happening at the Open Property Data Association (OPDA), chaired by Maria Harris, the industry-known tech advocate.
OPDA is spearheading efforts to standardise and digitise property data, a move aimed at streamlining purchase transactions, enhancing transparency and speed, and ultimately redefining the homebuying process.
For advisers, having the information available when researching the mortgage options for the client will save the mortgage adviser and the customer time in the long run. For example, there may be details about the property that are not acceptable to certain lenders and may have otherwise not been found out until after the cost had been incurred for a survey.
OPDA’s work on standardisation and digitisation means the information can be shared digitally between all the parties in the chain instantly and in a format each party can work with. Mortgage adviser systems are very different from surveyors’ or solicitors’ systems, and the OPDA has been developing a common language enabling each system to communicate more effectively with each other.
The beginning of change
The digital property pack is the start.
We have been asking ourselves for some time why customers have to prove their identification to the adviser, then the lender, and then the solicitor. Using language standardisation and open application programming interface (API) and credentials technology, the customer will be able to deposit their information in a ‘vault’ that will then be accessible to all of the parties and their systems.
Clearly, there is more work to be done, but we are on the path. In fact, there are two further initiatives that keep this high on the roadmap at government level.
The first is the King’s speech, which passed a data bill setting out the legislation needed for reusable digital identity, smart data (private data sources), and other data (public data sources) to be digitised and shareable.
The Department for Levelling Up Housing and Communities (DLUHC) was awarded £3m in the Autumn Statement to improve the homebuying process with open data standards, which is what the OPDA has created. The DLUHC will continue to work with OPDA on building trust and an interoperability framework.
You can think of this as open banking, but for property data.
The potential for savings in the time it takes for a house purchase to complete is immense, as data are received by everyone in the chain upfront. This can include the customer paying for searches upfront, and in recent trials, a house purchase went from offer to exchange in just 15 days.
A number of industry players are currently configuring their systems to adopt the new standards. This includes Rightmove, which helps agents at the front end of the process. Lenders like United Trust Bank, Lloyds Banking Group and Atom Bank are involved, as is One Mortgage System (OMS), the adviser client relationship management (CRM) system.
OMS expects to relaunch the property area of the popular adviser CRM in the next couple of months, making it ready to adopt the new technology, which will ultimately benefit all our clients.
This is just one area where technology can play a large role in the mortgage process. With the rapid onset of new technologies such as artificial intelligence (AI), I am sure there will be plenty more to come.
