The term ‘price on application’ (POA) can no longer be used in property listings following a ruling by a trading standards body.
National Trading Standards Estate Agents and Letting Agents Team (NTSELAT) has said the use of POA in listings is misleading and goes against consumer protection legislation.
The body was asked to provide a view on the use of POA as part of an industry push to improve the disclosure of information in property listings.
It said: “NTSELAT’s opinion is that the use of ‘POA’ in relation to a listing on a property portal or an agent website is likely to be misleading as it withholds – or in some cases masks – the asking price from consumers.
“The property’s price is information which the average consumer needs in order to make an informed transactional decision such as to make enquiries about the property, conduct further research or arrange a viewing.”
What is POA?
As the term suggests, POA means that instead of displaying a property’s asking price on its listing, potential buyers instead have to contact the estate agent to find out what it is.
There are a number of reasons why estate agents might use POA.
They may use it if they are unsure how to value a property, for example if it is unusual or bespoke, to gauge how much interest there is in it before setting the price.
They may also go down this route if the owner wants privacy over how much their home is worth, such as if they want to hide it from their family or neighbours, or if they are famous.
In some instances, it may be used if the estate agent thinks the owner is being over-ambitious about their property’s value, as it enables them to test the water, without risking putting off potential buyers if they later decide to reduce the price in the future.
But there is also a downside to using POA, as it may put people off enquiring about the property on the assumption that if they have to ask what the price is, it is likely to be outside of their budget.
Who does it affect?
The move to no longer use POA is good news for the housing market as it increases the transparency over property asking prices.
It will also help potential buyers to be confident that they are not paying over the odds for a property because the estate agent received a high level of interest in it.
It could also benefit sellers, as they will not have to take the risk of losing potential buyers, either because they assume the property is too expensive or because they are put off by the lack of transparency, if the home is listed as POA.
What’s the background?
The end of using POA in property listings is the latest move in an ongoing initiative by NTSELAT in partnership with the estate agency industry to improve the disclosure of important information on property listings.
Earlier this year it published a list of ‘material information’ that should be included in all home listings, including a property’s council tax band, its price, and information on its tenure, such as if it is a freehold or leasehold property.
Estate agents were given until the end of May to include all the information in their listings.
Other important details, including whether a home is in a flood risk area, will be included in later phases.
The initiative has received overwhelming support from estate agents, with 91% agreeing that having a defined list of the basic information that should be included in property listings would help to improve clarity for the industry.