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Paul Offley of The Guild: Disclosure of material information – why the changes have come into play
Compliance Officer at The Guild of Property Professionals, Paul Offley, recently spoke to James Munro, Head of the National Trading Standards Estate and Letting Agency Team (NTSELAT), about the recent changes regarding the disclosure of material information.
Offley asked Munro where the decision came from to make the changes and why now? “If you go back a number of years, you will recall the Property Misdescriptions Act, which was an attempt to regulate property descriptions in property advertising and listing,” says Munro. “While it was a well written piece of legislation with a schedule that effectively listed what we are talking about today, however, the biggest drawback was that the act said ‘if’ you make a statement about the following particulars that is false or misleading you are committing an offence. The key word being ‘if’, because if you didn’t make a reference to those points, you couldn’t fall foul of the law. I think this led to a situation where agents weren’t disclosing information because they didn’t want to fall foul of the act. I believe this created a culture change, as well as an uneasy relationship between agents and conveyancers.”
Munro continues: “The Consumer Protection from unfair trading regulations came in during 2008 and these transformed the whole regulation of business within the UK. They replaced the Trade Descriptions Act, and shortly after they replaced the Property Misdescriptions Act. While these Regulations are wide ranging, the biggest challenge with them is that they don’t specifically mandate disclosure of information.
“They do introduce the concept of material information, which is the information an average person needs to make a transactional decision. This involves doing anything to do with that transaction, from picking up the phone or emailing, right through down the line prior to the contract and after the contract. It is the prior to the contract element that is important here, where the Regulations say that if you fail to disclose material information you commit an offence.”
Munro adds that where this caused issues is property agents do not know what material information they were required to provide because there was no list. Housing is also probably one of the most difficult things to market and define because every property will have something that is relevant to people’s transactional decision, such as restricted covenants that will legally restrict what can be done to a property. “It is no good finding out information after you have had a survey commissioned or have your mortgage in place, especially if that information would have been detrimental to your decision,” he comments. “The changes are about avoiding that, and about shifting the culture within the property sector.”
Offley says that new material information disclosure guidance is split into three parts, with part A specifically mentioning property portal listings and properties listed on agent’s websites. “Yes,” says Munro, “part A is non-optional information, which is information that will have a direct financial implication for people. We took the view that most people start their journey on the property portals and then would be referred through to an agent. The same software that drives the content on the portal, also essentially drives the content the agent’s websites. Starting with the portals and making sure they are the enablers of this information and have the structures in place to display this required information was key. The onus for sourcing and adding it to the system clearly rests with the agent, however, the software needed to be changed to ensure the information could be displayed.”
“How will this be regulated?” askes Offley. In reply, Munro says: “To a large degree it will be self-regulated by the portals. The hope is that in time, portals will refuse to add properties to their sites if they do not contain the required material information. It will take some time, as this is a huge culture shift and asking people to change their systems this quickly will be challenging. We are hoping, in the short term, where there a listing that does not have the required information there will be a warning highlighting the fact that the information is missing and needs to be added. In the long-term, the hope is that the portals will not host the listings at all if it doesn’t meet the information requirements. Also, we are encouraging agents to report listings without the required information to either us or the portal so that action can be taken. The portals have a responsibility to display accurate information, and where something is brought to their attention, they are expected to take action.”
Dexters is fusing digital strategy with a traditional approach to deliver strong profits
Since 2017, like a prophet in the wilderness, my day job has been as a consultant to a large number of proptech and fintech founders. I’ve been doing my bit to convince real estate operators that the right type of digital transformation can add huge profits.
Dexters, it would now appear, are very much the industry’s case study, having just reported over a 30% uptick in its latest profits. With a gross profit of around £40 million on a £143 million turnover.
For any agency to digitally leverage its profit base, the business needs to be fundamentally a great business to start with, and Dexters was and is such a business. It was efficient and had a great brand with lots of key staff in situ for many years, running flagship offices.
Then, after seeing an opportunity, it enhanced its market position by selectively executing a people and tech strategy, which meant it could deal with more business. Yes, it has been on an acquisition trail buying up agency businesses, but it also bought market share and digital strength by buying Howsy, an app-based lettings platform, and the assets of Rentify.
There is no quick route to having a real estate business that delivers profits, it takes investment and total focused attention from the teams that run the branches.
But what is becoming clear is that there appears to be a two-tier league table opening up, where forward-thinking and forward-planning businesses who selectively embrace and invest in the right technology are squeezing out every last profit, whilst other agencies cling to their old models of business.
There is no quick route to having a real estate business that delivers profits, it takes investment and total focused attention from the teams that run the branches.Andrew Stanton
Though it wasn’t quite London, where Dexters and its other agencies under other brands operate, I was in a medium-sized town yesterday, with a population of about 170,000. Having not been there since the start of the pandemic, I noticed a large new agency perched at the top of the high street. As I walked around, I saw that a number of very established agency businesses had gone.
Over lunch, as I spoke with an old friend who is still very much in the property business, I learned that the new agent had acquired the other businesses and was now a very dominant player in lettings there. I said they could do this as the agency was using property technology to create the huge efficiencies that can be pushed into the lettings business.
Yes, it was still very much a people business, but a team of six in the new agency was dealing with the same workload that twenty staff across four former businesses were, whose owners thought excel sheets and a top-heavy human approach was a great way to run a business.
Pre-pandemic, perhaps. In 2030…definitely not.
PRESS RELEASE: Just Move In raises $5 million in funding round
- Fast-growing startup Just Move In raises $5 million (£4 million) in latest round, which also includes follow-on investment from Simon Rogerson and Chris Hulatt, founders of Octopus Group
- Its technology platform helps save people time, hassle and money during the home move process
- Just Move In is at the forefront of responsible entrepreneurship, balancing profit with purpose as a Certified B Corporation
Home setup service Just Move In, which counts Hamptons, Openrent, and Pickfords among its clients, has raised a new funding round totalling $5 million (£4 million) led by Longbrook Ventures and Love Ventures.
The round was supported by Mountside Ventures, alongside a crowdfunding round with follow-on investments from a host of angels, including the two co-founders of Octopus Group, Simon Rogerson and Chris Hulatt. John Browett, the former CEO of Dixons – and now Just Move In Chairman – has also invested.
The company makes moving in and out of a home easier — whether you’re renting or buying — by giving customers a platform to manage a wide range of services, from setting up the broadband and informing the council of the new address, to recommending removals and storage companies.
Movers are supported by ‘Move Specialists’, who can assist with any questions that might arise during the process. Just Move In is building technology to automate as much of the move-in/out administration as possible, streamlining the registration and payment process with dozens of suppliers.
Andrew Gale, Founder of Longbrook Ventures, says: “Just Move In is providing an innovative, frictionless solution to an extremely cumbersome problem that all movers face. I am confident that with this team’s passion and hunger, they will build on the impressive traction already achieved to date and deliver an exceptional outcome for all.”
Just Move In co-founder Ross Nichols says: “Moving home is one of the most stressful things you’ll ever do, and on average, we each move home 11 times during the course of our lives. Just Move In exists to make moving home hassle-free.”
Where possible, Just Move In partners with ethical businesses and works exclusively with green energy companies, including Octopus Energy. Just Move In is proud to be a Certified B Corporation, meaning it is a business that meets the highest standards of verified social and environmental performance, public transparency, and legal accountability.
Just Move In co-founder Tom Old says: “We believe in the three Ps principle – people, planet and prosperity. We are proud to be part of the growing community of B Corps across the world, which are proving that for-profit companies can be a force for good and that business leaders can work together to build a more inclusive and sustainable economy.”
The Home Setup Service is free to anyone referred to Just Move In via one of its corporate partners, and optional upgrades are available during the registration process. The company plans to launch a direct to consumer proposition in late 2022.
New Build Resident Experience Report 2022
Rapid expansion has given HomeViews the UK’s most detailed dataset on the new build buying and lived experiences. This report is our first-ever in-depth analysis of that data.
The result? A positive picture overall. New build owners rate their homes at 3.90 out of 5, and 79% said they would recommend their developer.
The inaugural HomeViews New Build Resident Experience Report reveals what residents really think of the UK’s new homes. Data from over 12,000 carefully verified reviews covering more than 1,870 developments are analysed and segmented in a way only HomeViews can.
We look at regional variance, demographics, first time buyers, shared owners, sustainability and more. The property search and sales processes will be analysed alongside the longer-term lived experience of new build residents.
We also list the country’s highest-rated buildings for a variety of criteria and discover the factors behind some of the country’s lowest-rated developments.
Download your copy now to learn:
- How do key factors like the sales process, build quality, value perception and placemaking affect resident satisfaction?
- What is the first-time buyer experience like for new homes? How can it be improved?
- How satisfied are UK residents with their new build homes?
Andrew Stanton is the founder of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.