But what did it really sell for?: Vivien Goldsmith asks whether buyers would be helped if prices paid for houses were made public

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The Independent Online
MOST people who buy a second-hand car check one of the dealers' bibles for the going rate. But when you buy a home for ten times as much - or more - there is no national register of standard prices and you cannot even find out how much the seller paid last time the property changed hands.

The Lord Chancellor has been taking soundings about including prices on the Land Registry, which is now open to public inspection. He has to weigh the views of those who believe that the price you paid for your home is no more anyone else's business than your salary, and those of the professionals who are advocating more openness about property price. Valuers want the security of basing their judgement on what a property has actually sold for in the past - they have often been criticised for overreacting to falling prices and valuing properties so low that sales have fallen through.

The price paid for a property has not always been secret. It used to be part of the information recorded on the Registry, but that was before 1976 when public had no access to the Registry. Vendors' solicitors were said to be nervous that the buyer would see the previous price at the last minute when the documents had to be signed. They feared that the buyer would take fright on seeing that the seller was making a whopping profit and might pull out of the deal at the last moment.

Solicitors would often obliterate the price from office copies so that the buyer would not discover the truth. And in 1975 the Law Society asked for the need to have prices recorded to be removed to save them all that correcting fluid.

This caution on the part of the solicitors is not always shared by the buyer, however. Mark Unsworth, a solicitor with Unsworth Rose of North London, says buyers often ask if he can find out the price. This is usually available for leasehold property where the price is part of the lease, but more difficult with freeholds.

'In my experience people then look at one of the house price indexes and work out how much the property 'should' now be worth. But even if they are paying more, they are not put off if similar properties are selling for less.'

John Wriglesworth, housing analyst at stockbrokers Phillips & Drew, says, however, that attempts to gauge a reasonable selling price for an individual property by referring to a previous selling price would tend to push up some prices and depress others. Even if regional price information was used, certain areas and even certain streets would tend to gain or lag behind average prices. Even if information about sale prices was logged by the Registry, this would not be useful for compiling a national house price index, as the registry would not be able to take into account the mix of property sold in any one month. There would simply not be sufficient information about the property.

If there was a flurry of selling of cheaper properties, for instance, it might appear that prices had fallen overall, which would not necessarily be so. The Royal Institution of Chartered Surveyors has no truck with arguments about privacy and secrecy. Its chief executive, Michael Pattison, believes that there should be a fundamental rethink about property and wants to eliminate secrecy. He supports the Doomsday 2000 project which aims to recreate the Norman inventory of all property in the country.

'People were suspicious,' he says, 'because that was a register for tax purposes. But the Government has been spending millions of pounds of public money gathering information, such as pounds 80m for the census on agricultural land for claiming European Union grants, and pounds 60m on council tax bandings. But this information cannot be used for other purposes. For home buyers open information about prices would make the market more open. We have to redefine what is personal information. This would help everybody.'

Scotland, Northern Ireland and the Channel Islands, in common with many European countries, do have open registers of house prices. In Guernsey, for instance, only the price paid for the freehold interest, the 'realty', is recorded. The 'personalty' - or curtains, carpets and fittings - is not included in the register and stamp duty is not paid on this part of the transaction.

Chris Bradshaw, chief executive of Bristol & West Building Society's international offshoot, says all transactions would be queried by the courts if the 'personalty' was more than 10 per cent of the overall price. The prices are published monthly. But all this price information does not create a great stir. 'Most people don't check the previous price before they agree a price,' he says.

There are a whole range of factors that can affect a particular selling price. It could have been increased above the norm by strong competition by two potential buyers, or reduced by the seller's need for a quick sale. Over time, too, properties can be improved or degenerate. So the value to the would-be buyer of knowing the previous selling price is limited anyway .

If the Lord Chancellor decides to sweep away the arguments about privacy and follow the views of the estate agents, solicitors and everyone else involved in the property muddle, there will be some novelty value in knowing about the prices paid before. But this could soon wear off as potential buyers discover that the information is not much use and sellers refuse to be swayed by reproofs about what constitutes a reasonable profit.

(Photograph omitted)

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