Online property search market needs shakeup

More competition is needed in the market for online property searches, according to new research.

Over 1.5 million property transactions are conducted in the UK every year by property buyers, and from 2007, property sellers in England and Wales will have to provide property searches as part of the new home information pack.

But the Office of Fair Trading (OFT) has found that the price of property searches provided by local authorities varies greatly, with a range of £55 to £269, and said "it is likely that some consumers are paying too much".

The OFT said local authorities should make their property information available to third parties who can set up in competition.

It 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 (NLIS).

The NLIS acts as an electronic interface between end users and local authorities. It channels online requests from conveyancers, sends property searches back to them and receives payments, via a central hub.

The hub provides a central point of contact between local authorities and other providers of property information, passing on requests to the local authorities and other information providers, passes back property searches and processes the payments.

The OFT said making the NLIS brand and software more freely available, as well as encouraging local authorities to sign deals with retailers outside NLIS, will create greater consumer choice and competition "in this innovative part of the market".

OFT chairman Sir John Vickers said in a statement: "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."