HIPs now ready for the taking

by Paul Broadhead

HIPs require all professionals involved in the house buying and selling process to pull together to minimise the chances of a transaction fal ling through.

Home Information Packs have now been rolled out to all properties for around five months and they seem to make a difference.

Estate agents are beginning to embrace them, despite the fact that they remain an easy political football, which the Opposition has no qualms about kicking.

The Conservatives are threatening to abolish HIPs if they are voted into power, while the Liberal Democrats remain critical of the Government’s handling of the project.

So what lies in store for HIPs over the next two years? It is genuinely accepted that we are unlikely to get a general election until 2010, particularly following the recent results in the local council elections and mayoral race in London. Rather than continuing with their barrage of criticism, I think the interim period would be best used by the Conservatives and Liberal Democrats to lobby the Government to put back in the HIP all the valueadded consumer information that it decided to make voluntary in 2006, in particular, the Home Condition Report.

First day marketing

The Government has now provided clarity that the transitional arrangements regarding the first day marketing concessions and leasehold information will be extended to the end of the year, at which point all transitional arrangements will cease to be in force.

From January 1 2009 a HIP will need to be in place before a property is marketed. We recognise, as does the Government, that there are still problems in obtaining searches in a timely fashion in some areas, and also in obtaining information on leasehold properties. We welcome the government’s decision to launch a working group to address these issues and ensure that the expiry of the transitional arrangements passes as smoothly as possible. Sales aid Of course, for agents, selling houses is a more pressing issue than the HIPs fiasco, due to large numbers of properties on their books, a reduced number of buyers in the marketplace and reduced mortgage funding for those buyers that are in the market.

But I believe HIPs can assist agents faced with these challenges. A number of our members have found that including environmental information, a condition report, and quotations to fix any defects in the property really does increase the chance of a completed sale. In the current market conditions consumers are extremely price sensitive but when the benefits of providing a detailed pack are explained to them properly they usually agree that it is a worthwhile expense. It is also worth agents pointing out to them that they do not need to pay for the HIP upfront unless they choose to do so.

There is of course very valuable information in the basic HIP. Take the Energy Performance Certificate for example. This provides a number of cost effective measures that can be taken by a householder to reduce their energy bills. A large number of these measures can be paid for with a Government grant.

HIP Code Agents should only use HIP Codecompliant packs as this not only protects buyers and sellers, but it also protects agents, clients’ conveyancers and mortgage lenders. There has been a great deal of publicity surrounding the acceptance of private sector searches by mortgage lenders and while most accept them at the conveyancers risk, some still do not accept them at all. As far as the HIP Code is concerned, only private sector searches that comply with the Search Code are covered - any risk in accepting them is underwritten by the Code.

Efficiency

To get the best out of the HIP process, agents should ensure that their sellers’ conveyancers have the opportunity to examine the HIP early on in the house buying process.

This allows them to check that everything is in order and there are no issues that may cause the transaction to fail or be delayed later in the process. It also gives them an opportunity to obtain any further documentation that may be required, such as planning permission or building regulations approval for a past extension to the property. Agents may ask why a seller’s and not a buyer’s conveyancer should do this. Granted, it is usually the buyer’s conveyancer tasked with this, but purchasers’ conveyancers are only going to raise enquiries and ask for this additional documentation anyway, once a sale is agreed. Having these documents to hand will save time for the exchange of contracts and make life easier for the clients, the agent and both lawyers. I accept that the HIP is incomplete and that the government should have handled the implementation better, but HIPs are now a legal requirement in the home buying and selling process.

Thus, it would be great to see all the industries that touch the home buying and selling process working together to ensure the packs do their job in the most effective fashion.

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