The Office of Fair Trading says property information held by local authorities in England and Wales should be made more readily available to people buying and selling property and their agents.
Over 1.5m property transactions are conducted in the UK (1.4m transactions in England and Wales) each year.
Property buyers need information relating to a property and its environment that may affect its value or their desire to live in it – for example, planning permissions, road schemes and building regulations.
Such information is generally bought as a property search and obtained by conveyancers on behalf of property buyers and sellers.
From 2007, property sellers in England and Wales will have to provide property searches as part of the home information pack.
Information holders include local authorities and water companies.
Property information is obtained through three main routes.
The first is through a direct request to the information holder. The second, through an electronic gateway, that acts as a centralised point of contact between information holders and consumers and their conveyancers. Or the third way is through a property search company, which co-ordinates searches to provide a single package.
Local authorities hold the majority of the information needed to complete one type of property search.
The OFT found that the price of property searches provided by local authorities varies greatly, with a range of 55 to 269, it is likely that some consumers are paying too much.
Local authorities provide property information under a complex framework of legislation; some local authorities restrict access by property buyers and their agents, including PSCs, to the property information that they hold.
The OFT recommends that local authorities make their property information available to third parties on non-discriminatory terms that do not advantage their own property search activities over competing property search providers.
This should create greater consumer choice and more effective competition within the market for property information.
In particular all local authorities should be required to give access to all the information needed to complete an HIP before the packs are introduced in 2007, so that competition from the private sector in the compilation of local property searches is not eliminated.
Central government should provide clear guidance on how local authorities should set prices for providing property information to consumers and their agents, including PSCs, so that competition is not distorted.
Local authorities and ODPM should agree a revised best-value performance indicator to ensure that local authorities make this information available quickly, and on the same timescale that they apply to themselves.
The Welsh Assembly should include a similar measure in the framework for local authorities in Wales.
The study also recommends liberalising the electronic provision of property searches compiled by local authorities in England and Wales.
At present there is a single electronic source of such searches in England and Wales, called the National Land Information Service.
Making the NLIS brand and software more freely available, and encouraging local authorities to set up connections with retailers outside NLIS, should allow for greater consumer choice and competition in this innovative part of the market.
Sir John Vickers, chairman of the OFT, says: “Property buyers must have all the relevant information that might affect their choice of property.
“Developing electronic provision and the introduction of the home information pack mean that there is an ideal opportunity to set the conditions for a dynamic market that serves consumers well in the future.”