INCREASED PRICE CLARITY TO BE WELCOMED
Published 30 May 2022
Some welcome new guidance from the National Trading Standards Estate and Lettings Agency Team, the body which is primarily responsible for the regulation of estate agency work in the UK and letting agency work in England, will see further steps taken to providing house buyers with clear information, which can only be a good thing.
The body’s latest missive has outlawed the practice of advertising properties for sale ‘POA’ – meaning ‘Price on Application’, and it has indicated that it is likely to follow this with a review of the use of phrases such as ‘Offer in the Region of…’ and ‘Guide Price’.
It is important to point out that even when a property is advertised with a clear asking price, this is not a fixed price, like it would be if you were buying a can of beans in a supermarket. Legally, the asking price of a property for sale is what is known as an ‘invitation to treat’, which means it constitutes no more than a basis for discussion and negotiation.
Despite this, it is important that consumers are provided with as much clarity as possible, and ruses such as ‘POA’ or ‘OIRO’ go against this basic principle. In any walk of consumer life, there is little defence for withholding information, and this is especially true when it comes to buying a home, which for most people is the biggest financial transaction they will ever undertake.
The vast majority of house buyers are not property professionals, and therefore cannot reasonably be expected to guess the value of a home. So withholding the price is simply trying to pull the wool over the consumer’s eyes; it’s about enticing them in unreasonably.
It’s a bit like job advertisements which use phrases like ‘competitive salary’ without offering a figure, in the hope that once an applicant is in the interview process, they can be persuaded to accept a lower salary than might otherwise be offered.
Fortunately, in Norfolk the ‘POA’ ruse is fairly rare (it’s much more common in London), but we do see some lack of clarity when it comes to asking prices. There is no real excuse for this, and it’s good news that the minority who still adopt these practices are being clamped down on.
This is not the end of NTSELAT’s efforts to inject new levels of openness into the residential property market. It seems certain that they will turn their attention to other areas of property advertising where information is patchy or even deliberately withheld.
One area already under the spotlight is how leaseholds are described. The prospective buyer should be provided with all the key details of a leasehold property: how many years are left on the lease; what the ground rent is; what the basis of any future increases will be; any restrictive covenants contained in the lease.
Responsible estate agents – and that is the majority – will join consumers in welcoming this kind of crackdown on incomplete information. A market where agents are open and upfront about everything the buyer needs to know is a market which will operate more efficiently, more fairly, and ultimately more beneficially for all involved.
Share this story
Find out more Contact Jan Hÿtch>
Arnolds Keys Blog
24 May 2022
Former US Secretary of Defense Donald Rumsfeld got himself into all sorts of bother with his ‘known unknowns’ speech (20 years ago this year – are you feeling old?), but... Read more >
6 May 2022
It has been well-documented that demand for good quality rental properties is exceeding supply, and this is having a knock-on effect to those landlords seeking to recover possession of their... Read more >
3 May 2022
In the current market, with limited supply and more buyers than there are houses available, it is always tempting as a seller to be seduced into setting your asking price... Read more >