Ad description
A property listing in the "For Sale" section of www.rightmove.co.uk. Text under the heading "Full description" stated, "Tenure: Leasehold".
Issue
The complainant challenged whether the ad was misleading because it did not make clear the length of the lease.
Response
Chesterton Global Ltd said they were aware of their obligation to make marketing material clear and unambiguous, and as such they followed the guidelines set by their industry governing bodies. They said that the lease length of the property was 101 years and 11 months, and that the length of the lease would be communicated to any consumer who made contact with them or enquired further regarding that property. They said that any member of the public reading their ad would generally know that all flats in England were leasehold rather than freehold, and would then have contacted their sales branch for more information.
Assessment
Not upheld
The ASA understood that the number of years left on a lease could affect the opportunity to obtain a mortgage, and could also impact on any potential resale of a property. We understood that mortgage lenders often placed a limit on the number of years which could be left on a lease when offering a mortgage. We understood that, assuming a 25-year mortgage was being offered, the vast majority of lenders were likely to refuse a mortgage if the lease had somewhere between 50 and 75 years remaining. A small number might refuse mortgages if the lease did not have at least 80 or 95 years remaining.
We also understood that extending a lease, especially one which had a short life, could be both costly and time-consuming. Once the number of years left on a lease dropped below 80, an additional premium applied when renewing the lease, referred to as the 'marriage value', which could significantly increase the cost of that renewal.
We considered that the length of the lease was material information which a buyer would need to know when making a decision to purchase a property. However, we considered that omitting that information from the ad would only be misleading if it was likely to affect a buyer's decision to enquire further about the purchase of the property.
We considered that the number of years remaining on the lease in this case was sufficient to ensure that it would not affect a buyer's ability to obtain a mortgage, and that the lease could be renewed without the potential extra cost of the marriage value. We therefore considered that omitting the length of the lease in this case was unlikely to affect a buyer's decision to enquire further about the property We concluded that the ad was not misleading.
We investigated the ad under CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising), but did not find it in breach.
Action
No further action necessary.
