There are multiple websites in the UK offering house-prices sales data for free. You can type in the name of a road - or provide a postcode - and details of every property sale in the last five years are presented.
This is a great service for purchasers and sellers alike.
It does, however, present several problems. The most obvious is that it's no longer possible to brag dishonestly to friends. A seller cannot claim they achieved a better price than they did and a seller cannot claim they got the bargain of the century. Estate agents probably find such websites a pain since information they previously had exclusive access to is now available more widely.
It occurred to me last night, however, that the presence of such websites provides an unusually high incentive to overstate the price at which a property sold - and that this could make the data less useful than it first appears.
Imagine a vendor and purchaser have agreed a sale at £275k. Were they to structure the deal as a £280k purchase price, with a £5k cashback from the vendor to the seller, some interesting things emerge:
* The vendor gets to brag about getting a higher sale price
* The estate agent gets to brag about rising house prices and their sales prowess
* The mortgage company can report higher selling prices
* The purchaser has a higher baseline entered for their property into the online databases, which will help them when they come to sell
* The government makes more stamp duty revenue (3% of £5k = £150)
It is rare indeed to find such a convergence of interests.
Now, there would be losers: the purchaser would lose £150 and some bragging rights and future purchasers could be considered to have been misled over the real price. The first could be considered a trade worth making in exchange for the benefits it provides (and the cost could easily be split with the other parties who stand to gain). The second is a clear externality - and, as such, wouldn't change the equation for those participating directly in the trade.
So, my question is: is such a thing legal? I'm struggling to articulate a clear reason why it wouldn't be.
Assuming it is legal, is it really realistic to assume somebody else hasn't already spotted this? If not, presumably it is happening all the time.
My supplementary question, therefore, is: how would one detect such behaviour and is there any way to deduce the true selling price for a property from the publicly available information?