HIPS (HOME INFORMATION PACK)

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!

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!

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 had 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 assistance of a large stick!) with the Home Condition Inspector!

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 the HIP gives the buyer early information on Legal Title matters, but little else.

Please also bear in mind that the seller wants to reduce his up front costs as much as possible and there are many 'cut price' HIP providers out there and, may I add, many of the cheapest ones have gone into liquidation!

You use a Solicitor to sell and buy (£ a not insubstantial amount), you use and Estate Agent to sell (£ much wonga!), you pay for the Mortgage Valuation (£ depending on the mortgage deal).

Think carefully and add up the total costs of moving.

Then add another £400/£500 pounds for a good quality private survey.

I know that everyone is after your hard earned cash, but that extra cost could very likely result in you negotiating a price reduction.

If nothing else, you then know exactly what you are buying and not what you think or hope you are buying!

Which of the other cost that you have to accept can do that?