Landlords considering selling their rental properties may encounter higher costs during the sales process, according to recent guidance from the National Trading Standards Estate and Letting Agency Team (NTSELAT). This updated guidance, which aims to enhance transparency in property transactions, requires sellers to disclose a broader range of information termed “material information” in property particulars. Such information includes details about restrictive covenants, property listings, tree preservation orders, and rights of way. As a result, landlords transitioning out of the sector may find themselves facing additional expenses, potentially amounting to hundreds of pounds.
A prominent conveyancing solicitor has raised concerns regarding the financial implications of this new guidance for landlords selling their properties. The requirement to disclose specific details such as restrictive covenants, property listings, and tree preservation orders could lead to increased costs associated with updating property particulars and conducting additional due diligence. These added expenses may pose challenges for landlords seeking to sell their properties efficiently and cost-effectively, potentially impacting their overall return on investment.
While the intention behind the NTSELAT guidance is to promote transparency and protect buyers, landlords should be aware of the potential financial consequences when selling their rental properties. As the property market continues to evolve, staying informed about regulatory changes and their impact on sales processes is essential for landlords looking to navigate the selling process effectively. By understanding and adapting to these new requirements, landlords can minimize potential costs and ensure a smoother transition out of the rental market.
Furthermore, sellers are now obligated to conduct environmental and local land charges searches to provide comprehensive information on factors such as flood risk, coastal erosion, coalfield mining, and relevant planning permissions. While this additional step may entail increased effort and costs for sellers, it aims to enhance transparency and ensure that buyers have access to all relevant information before finalizing a purchase decision.
This change in guidance represents a significant shift in the property selling process, transferring the responsibility of obtaining crucial information from buyers to sellers. Simon Nosworthy, head of residential conveyancing at Osbornes Law, describes this development as a “revolution” in the UK’s home selling landscape. With buyers gaining access to comprehensive information upfront, this shift aims to streamline the purchasing process and provide greater clarity and assurance to all parties involved.
“Sellers will now need to involve a conveyancing solicitor before listing their property, rather than waiting until they receive an offer. This means that even if a homeowner fails to sell, they will have incurred expenses on fees and searches. Overall, this could result in homeowners spending hundreds of pounds more.”
The release of the new guidance occurred in two phases. Approximately 18 months ago, the first part (part A) mandated property listings to include price, council tax band, and whether the property is freehold or leasehold. Most estate agents were already incorporating this information.
In November of the previous year, two additional sections (parts B and C) were introduced. Part B involves information regarding utility supplies, heating, and parking, while Part C, the most significant change, includes crucial details such as restrictive covenants, tree preservation orders, and rights of way. This implies that sellers will now require solicitor involvement before listing their property.
Nosworthy further explains, “Although the guidance was announced in November, it seems that NTSELAT is allowing time for estate agents to undergo training before enforcing it. Despite limited consumer awareness currently, homeowners may soon find themselves obligated to gather this information about their property in the coming months.”
“However, it still remains to be seen what the housing platforms like Rightmove do about the guidance and if they make estate agents list this information.
“While it may be seen as an arduous hurdle for those selling a home, it is good news for buyers and should ensure the whole process is smoother. It also has the added benefit of meaning there will be no nasty shocks down the line for buyers.”
