Service charge

Inside Housing – News – Government to develop ‘critical information’ plan to provide details of service charges to buyers before purchase

Paula Higgins, chief executive of the HomeOwners Alliance, said she welcomes any move to give potential buyers the information they need upfront to make a decision.

She added: “It’s a crazy situation where buyers are spending valuable time viewing properties without having all the information they need to make one of their most important financial decisions.”

However, she said that since 2008 estate agents have been required by law to disclose material information about a property, and it was frustrating that so many of them failed to do so.

Beth Rudolf, delivery manager at the Conveyancing Association, said: “It makes perfect sense that this is in the upgrade promises.

“What we need is legislation to mandate a property pack and break through the trade barriers that currently prevent the provision of advance information to an industry where everyone can see the consumer benefits. “

Ms Rudolf pointed to Scotland where advance information packs are required and only one in 10 transactions fail, as well as some Australian states where sales information must be provided and only 2% of transactions fail.

However, property expert and buying agent Henry Pryor predicted there could be some return from estate agents to the plan.

He said: ‘It reduces the total number of homes sold because a lot of people spontaneously sell because they’ve found something else, don’t sell because they can’t sort themselves out. [with this information] fast enough to compete.

He highlighted the reaction of these agents following the introduction of HIPs and said: ‘Anything that reduces the number of properties offered for sale is generally opposed by estate agents.’

The information packs were part of a number of policies the government was considering in the white paper aimed at boosting home ownership. It also included exploring options to “further limit the competition that first-time buyers face” by examining the options available to prevent local residents from being excluded from certain housing markets.

A government source said they were aware that a large number of second homes or overseas properties concentrated in one area can have a negative effect on the number of first-time buyers and local communities if houses are left empty and “wanted to take steps to limit this”.

As part of this plan, it will assess how overseas countries have legislated to try to reduce this problem.

The problem of second home owners depriving locals of home security is particularly acute in areas like Cornwall, where prices are inflated by such purchases. According to 2018 government figures, there are approximately 13,500 second homes in the county, accounting for up to 40% of all homes in the villages.