HOME information packs may now be compulsory in most of the UK but few people have anything
good to say about them, reports HARVEY JONES...
After all the hype and controversy about home information packs (Hips) it is perhaps not surprising that many buyers and sellers say they consider them a waste of time.
They report Hips have failed in their prime aim of speeding up the house-buying process — in some cases they have slowed it down.
Everyone agreed the house-buying system in England and Wales needed a radical overhaul to speed up conveyancing and reduce the number of failed transactions.
Giving the buyers information upfront makes sense but this is a mess
But few, apart from former deputy prime minister John Prescott, who dreamed up the packs, and the companies that earn money from producing them, thought this was a sensible way to go about it.
Even worse, the introduction of Hips has been dogged by Government delays, blunders, rethinks and downright incompetence — and the problems are not over yet.
Ministers assured us Hips would speed up the transaction by handing buyers key documents such as title deeds, local authority searches and details of any warranties and guarantees, right at the start of the sales process.
The pack would also include an energy performance certificate showing the property’s energy efficiency and how it could be improved.
Most importantly, it was supposed to include a compulsory home condition report, a type of mini survey, giving details of the general state of the house, highlighting any faults such as damp or subsidence.
But panicky ministers robbed Hips of any practical value by making this report voluntary rather than compulsory after lenders said they would still demand buyers paid for their own survey. Unsurprisingly, few sellers have voluntarily shelled out for the report.
Shorn of their most important element, Hips have little value, says Melanie Bien, director of mortgage broker Savills Private Finance.
“They have actually slowed the sales process because vendors have one more thing to think about when marketing their homes. And they haven’t made the slightest bit of difference to buyers, who mostly consider them an irrelevance,” she says.
Implementation has also been a shambles. The Government postponed the original deadline of June 1, 2007 by two months, and even then, it was only for properties with four or more bedrooms.
Hips were made compulsory for three-bedroom homes on September 10 last year, were extended to every existing property on December 14 and finally to new homes on April 1, 2008.
Earlier this month, housing minister Caroline Flint announced yet another delay. The Government had insisted that by July, all sellers must have a Hip compiled before marketing their home. But with such information taking weeks to produce, ministers backed down, for fear of slowing the stream of properties on to the market. Now the deadline has been shoved back to December 31.
Robert Bryant-Pearson, chief executive of Allied Surveyors, says Hips should be scrapped. “The latest delay demonstrates what a mess the Government has made. Even the local authority search element hasn’t proved much use.
“The only good to come out of the whole shambles is the energy performance certificate.”
From December 1, home-sellers in Scotland will have to have a survey compiled before they market their properties. Similar to the home information packs each “single seller survey” is expected to cost up to £500 to put together.
Scotland has a different conveyancing system and Bryant-Pearson says its version of Hips is superior and is being introduced in a more sensible way. Paul Broadhead, deputy director-general of the Association of Home Information Pack Providers (Ahipp), argues Hips remain a sound concept.
“Giving buyers information about the property upfront makes sense because it allows their solicitor to unearth any problems earlier rather than later. But Hip implementation has been a mess,” he says.
Some criticisms have proved unfounded. “Critics said Hips would cost up to £1,000, but most cost around £300. This isn’t a new expense but transfers the cost of getting this information from buyer to seller. If a seller is buying another property, as most are, the overall cost should be neutral,” he adds.
Those who predicted Hips would spark a housing market crash were also wrong — the credit crunch and liquidity crisis look more likely to do that instead.
“Whether you like Hips or not, they haven’t been a disaster,” Broadhead says.
He admits they already need an overhaul. “We would like the home condition report to be compulsory because this would give the buyer much more upfront information.”
But with the housing market shaky and Flint under fire for accidentally displaying a secret Cabinet briefing note to photographers that suggested the property market would fall by 5 to 10 per cent this year, the Government has more pressing matters to deal with before tinkering with Hips yet again.
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