The Office of Fair Trading (OFT) has slammed the behaviour of some local authorities in its long-awaited market study of the property search industry, whose online services are fast becoming a crucial tool for conveyancing practices.

Published on 21 September, the OFT study criticises the provision of information by some authorities and the wildly differing prices they charge for property information, which currently range from £55 to £269.

The report's findings are likely to impact on the Government's plans to introduce 'home information packs' (HIPs) and fully electronic conveyancing, which are scheduled for launch in the next two years – with a 'dry run' of HIPs expected in 2006.

Concerns surrounding pricing and anti-competitive behaviour in the property search market have been taken extremely seriously by the OFT and others, because when the HIP legislation comes into force in 2007, all house-sellers will be required to provide property search information – usually from the National Land Information Service (NLIS) – before they can put their properties on the market.

In its report, the OFT stated that it was likely some consumers were paying too much for property searches; that the provision of information by local authorities was dogged by a complex framework of legislation; and that some local authorities slapped restrictions on the information that property buyers and their agents can access.

The report recommends that local authorities make their property information available to third parties on non-discriminatory terms that do not advantage their own property search activities against competing property search providers.

It warns that unless all local authorities are required to give access to all the information needed to complete an HIP before the packs are introduced in 2007, competition from the private sector in the compilation of local property searches might be eliminated.

The Government must give local authorities clear guidance on pricing for property searches, so that competition is not distorted, while local authorities should set up connections with property search providers operating outside NLIS.

Private companies that operate independently of NLIS have been vociferous in criticising what they see as a closed shop that has denied them the opportunity to trade on equal terms with competitors.

Sir John Vickers, the OFT chairman, said: "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."

Mark Riddick, chief executive of Searchflow, a property search company and chairman of the cross-industry data standards body, PISCES, said: "We have been calling for 'one market, one standard of information and one fair pricing structure' across the property search market for many months.

"The findings of the OFT study are in line with our own views, and send a strong message to the Government to reform and clarify the market as a priority."