The Week Explained: Property buyers must beware misleading information

A property purchase is likely to be the biggest investment most individual investors will make, but thanks to a combination of government ineptitude, property tycoon propaganda and skilful campaigning by the Real Estate Developers Association (Reda), property buyers find themselves in a market riddled with misleading information.

This is despite or maybe because of new rules introduced by the Estate Agents Authority at the beginning of this month requiring sellers of second-hand properties to provide buyers with precise information about both the net and gross sizes of properties for sale.

This makes one of a hell of a difference because it is common for the usable areas of a property to be something like 40 per cent smaller than the gross area, which has been presented as the benchmark measure of property size.

Since the new rules have come into force some buyers have discovered that they are actually paying more per square foot of usable space in mass-market flats than buyers of properties in posh areas such as Repulse Bay and The Peak.

Instead of celebrating the transparency brought into the property trade by this reform, the property guys have succeeded in putting it about that the new measures are "causing confusion" leading to buyer anxiety.

Meanwhile, since 2008, sellers of new properties have been required to provide details of a standardised "saleable area" but can still advertise their properties according to the old gross area formula. This adds to the confusion as these properties appear to be less expensive than second-hand properties.

The old gross space format allows developers to include the space taken up by lobbies, lift shafts, janitor's cupboards and so on when advertising the size of new flats.