Material information in property listings: Why it matters to developers

Issued by the National Trading Standards Estate and Lettings Agency Team (NTSELAT) in November 2023, the guidance on material information provided long-awaited clarity concerning information that prospective property buyers may need to make an informed decision under the Consumer Protection from Unfair Trading Regulations 2008 (the 2008 Regulations).

While primarily aimed at estate and letting agents, the guidance is also relevant to developers that market their properties directly to prospective buyers. As such, understanding this guidance and the impact it can have on upfront costs for developers and sellers is crucial, particularly as a failure to provide material information is a criminal offence under the 2008 Regulations, one that could also result in enforcement from National Trading Standards.

What is material information?

Since the Consumer Protection from Unfair Trading Regulations came into force in 2008, all businesses in the UK have had a legal duty to include any and all information that may impact a consumer’s decision, whether positively or negatively.

This is known as ‘material information’, and it applies to any details “which the average consumer needs, according to the context, to take an informed transactional decision”.

In some cases, knowing what constitutes material information is relatively straightforward. For more complex transactions, however, the definition of ‘material information’ can be more fluid and highly contextual.

What is the Material Information in Property Listings Guidance?

In property sales and lettings, information that is deemed ‘material’ will depend on, not just the type of property, its locations, and its amenities, but also the prospective buyer or tenant’s budget, current needs, and long-term plans.

Historically, this has caused difficulties, with the NTSELAT stating that “for too many [buyers], finding out material information about a property after entering into a property transaction can be devastating, causing significant emotional and financial distress”.

The stakes for sellers are also high, with individuals facing fines and even imprisonment for breaching the 2008 Regulations, as well as potential dawn raids and enforcement notices from National Trading Standards.

In response to these issues, the NTSELAT created an industry steering group to define ‘material information’ within the context of property sales. This led to the development and publication of the Material Information in Property Listings Guidance (‘the Guidance’) in November 2023.

While not exhaustive, the Guidance covers a range of information that must be included in all property listings, as well as information that may be required in certain contexts.

Its purpose, according to the NTSELAT, is to “help to improve the home buying and renting process” and foster “more informed customers, fewer complaints, and ultimately greater trust and compliance in the industry and those who work in it”.

How does the Guidance impact developers?

As the Guidance is relevant for any business that markets and sells properties to consumers, developers that market properties directly must also read and comply with the NTSELAT’s recommendations.

This means they are also held accountable for any information that is deemed hidden, unclear, or ambiguous, as well as any misleading omissions, all of which are a criminal offence under the 2008 Regulations.

According to the Guidance, affected businesses have a responsibility to, not just source the information they need in a proactive and timely manner, but also verify that this information is correct.

This will necessitate specialist support from surveyors, conveyancers, and legal professionals much earlier in the sales process – even before a prospective buyer has approached the business.

This is acknowledged by the Guidance, with the NTSELAT saying that “where a matter in this section is identified and further information is required, we recommend that property owners/ sellers and agents seek the services of qualified professionals (including, where relevant, a surveyor or conveyancer) to assist with the interpretation of the matter identified”.

What should developers do next?

The consequences of not providing material information outweigh the up-front costs from both a financial and reputational perspective. Consumer protection is also high on the agenda, as demonstrated by the Digital Markets, Competition and Consumers Act.

Nevertheless, collating and verifying information for each property is time-consuming, which is why it is important to have experts on hand from the very beginning to streamline the process and ensure information is both accurate and timely.

Over the long-term, this approach achieves more than just compliance with the 2008 Regulations – it also enhances the reputation of the business and rebuilds public trust in the UK’s housing market.