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New study into property search market

201/04      8 December 2004

The £200 million property search sector will be the focus of a new market study by the OFT.

See market study page

Property searches covering such areas as land ownership, environmental information and planning permission form an essential part of buying a property. This information, held by a number of bodies - including local authorities, the Land Registry, the Register of Scotland, the Environment Agency and the Coal Authority - is obtained by conveyancers through three main routes on behalf of property buyers:

• via a direct application to the information holder
• through an electronic gateway, which conducts electronic searches of the database of the information holders; and
• through a property search company, which coordinates searches to provide an all-in-one package.

The OFT has received complaints from property search companies about difficulties in accessing property information from information holders - each of which has a statutory monopoly over the information they hold - and about competition in the market as a whole.

The OFT's study will focus on how consumers' needs are met in terms of how information is collected, access to information, charges for this information, the structure of the market and regulation of the electronic gateway.

Announcing the launch of the study John Vickers, OFT Chairman, said:

'Property search is essential to buying and selling property and if things go wrong it can have distressing or costly consequences for buyers. So it is important that we assess this market to ensure that it is working effectively.'

The property search service falls into one of the five proposed priority areas set out in the OFT's draft annual plan (see note 3). The OFT aims to complete the study in summer 2005.

NOTES

1. The Housing Act 2004 places a requirement on sellers in England and Wales, or their estate agents, to provide a Home Information Pack when they start marketing a property. This requirement is due to come into force by 2007. A consultation is currently underway by the Office for Deputy Prime Minister to decide the content of the packs. See the Office for Deputy Prime Minister website for further information.

2. The OFT recently investigated a complaint of anti-competitive behaviour in the online property search market but found no grounds for action under the Competition Act 1998. However as a result of the investigation it was recommended that a market study be launched into the market as a whole. See press release 130/04 for further details.

3. The OFT's draft annual plan was published on 1 December 2004 (see press release 194/04 for further details).

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