AN INDEPENDENT SURVEYORS VIEW AS AT FEBRUARY 2008!
From a good and original idea, the Home Information Pack degenerated into a report on Legal Title and the Energy Performance Certificate (EPC). There again, what else should we have expected from the Office of the Deputy Prime Minister (John Prescott).
The idea of the HIP was to speed up house sales and to improve “transparency”, by including a Report on Condition (HCR), Legal information on property Title, Local Authority Searches and an Energy Performance Certificate (EPC).
As is to be expected, the scheme was set up, over a period of many years, without much in the way of reference to the people who knew best how to go about it!
The Law Society, The Royal Institution of Chartered Surveyors and the Council of Mortgage Lenders had some limited input but, as far as I can see, anything they said was pretty much ignored.
Let’s look at how this system now works.
When a house is to be marketed a HIP is ordered from a HIP provider. The home owner pays for this, generally up front.
You don’t have to actually have the HIP in existence to market the house, as at February 2008, so what is the point when the information may not have been produced for the potential buyer to see?
The EPC is produced and my views on this are very clearly expressed on another page on this site!
The Local Authority Searches are done, which will demonstrate what is going on there, e.g. are they planning to demolish the house for a new motorway scheme, etc!
That’s about it, but there are a few problems now being seen with the HIP scheme.
I do not know of any Solicitor who is prepared to trust the reports on Title and Legal searches. This means that you pay for the HIP to be produced on your own home, then pay you own Solicitor to do the Local Searches and checks on Legal Title on the house you hope to buy!
Hmmm! I see an increase in costs here!
This is not how it was meant to be and demonstrates how far out of touch
We are fortunate in that we have the full range of property professionals that know what they are doing. So why weren’t they used to formulate and instigate a workable system to achieve the Government aim of speeding up the house buying process?
The Law Society, The RICS and the Council of Mortgage Lenders could have dealt with the set up and instigation of an effective and worthwhile scheme.
The RICS did their bit, just before the scheme was intended to be fully implemented, and were instrumental in the Government diluting the extent of the scheme we now see to be in place.
Staggeringly, the Home Condition Report (HCR) remains a voluntary option, in that the home owner can pay an additional amount for this to be included in the HIP!
There is still talk of the Home Condition Report eventually making its way into the HIP as a compulsory item, but I certainly don’t see this happening, in the short to medium term.
We are a nation that lives predominantly in older housing stock, which could have caused quite a few problems for anyone wishing to sell their house.
Not only would any report on condition have raised points of disrepair, but this could have caused problems to anyone wanting to sell as the situation could readily have been present of a bad report being available for anyone to read.
I have the mental image of an extremely irate home owner, who paid up front for the report, asking various people why the report was not written in flattering terms, haranguing the Estate Agent/Solicitor/HIP provider that took their money and also possibly wanting to have a couple of quiet words with the Home Condition Inspector!
There were other problems that I could see, as well. Every Survey Report had to be backed by Professional Indemnity Insurance and I had envisaged a flood of claims going into Insurers over Home Condition Reports that had missed defects as they had been carried out by newly trained Home Condition Inspectors who didn’t have the experience or expertise to spot the problems.
I had my doubts that any of the mainstream Professional Indemnity Insurers would actually have been prepared to take on that Insurance risk.
The Council of Mortgage Lenders were very sensible about the whole thing and decided that they were not going to accept the valuations that were in the HCR, intending to continue relying on their panels of approved Valuers (Chartered Surveyors).
So, no cost saving there as anyone buying would still have to pay the Mortgage Application fee, which I suspect was one of the house buying costs that the Government wanted to get rid of, especially as they were continually reducing the cost to the home owner of HIP production, as the years passed, before its introduction.
All in all, a bit of a disaster from start to finish.
Here’s the real indicator of how singularly this Government introduced scheme has been unsuccessful.
I have yet to talk to an Estate Agent and be told that they have prospective buyers in their offices asking to see the HIP! That’s right; people remain unaware, despite millions of pounds of Government advertising.
The HIPs sit there, gathering dust. Frankly, anyone looking through a HIP won’t be interested in the information anyway and is likely to skim through, not taking any of the information in.
My view – a waste of time and your/our money. The sooner the whole scheme is abandoned, the better!