HIPS - Revisted
HOME INFORMATION PACKS REVISITED
Home Information Packs (HIPs) have been with us now for approximately 11 months. They were originally introduced on the 1 June 2007 for 4 plus bedroomed properties but have now been extended to cover all properties offered for sale. At the moment, it is permitted to offer a property for sale provided a HIP has been ordered but that concession is due to be removed on the 31 May next, from which date properties can only be offered for sale if they actually have a HIP.
Whether HIPs have had the impact everyone expected is still open to debate. Initially property pressure groups had feared that making HIPs compulsory would dissuade sellers from putting their properties on the market, thereby reducing supply and driving up house prices. That however does not seem to have happened. Sellers appear to have accepted that HIPs are a necessary evil to house selling and are putting their properties on the market. Furthermore house prices have been falling rather than rising, but of course for different reasons! The current credit crunch has resulted in a huge reduction in the number of mortgage applications submitted, so we are now faced with a situation of there being enough available properties for sale but not enough buyers for them.
HIPs were introduced by the Government with claims that they would provide key information to home buyers and so speed up the house buying process. That does not seem to have been the case, particularly in the current climate. The fact that sellers are able to market without having an actual HIP in place has reduced the impact of the HIP, which often becomes available during the house buying process. Buyers solicitors still want to raise their own pre-contract enquiries and receive the searches through the HIP at more or less the same time had they carried out the searches themselves. Furthermore some solicitors actually refuse to accept HIP local searches carried out by private search companies (as opposed to local searches issued by the local authority itself). In addition local searches in HIPs attached to properties which have taken some time to sell can be out of date by the time that the property is actually sold and therefore have to be redone.
An essential component of the HIP is the Energy Performance Certificate but this appears to be of limited interest to buyers. It reports on matters which a buyer can see for himself and in the final analysis a buyer is unlikely to withdraw from a purchase simply because the property has been given a poor energy performance rating.
From the solicitors perspective, therefore, the HIP appears to be of limited use and appeal; indeed in many cases it is a struggle to find out if a property is actually sold with a HIP and, if so, how one gets to see that HIP. Whether the impact of a HIP will alter as and when the Government makes it compulsory to have an actual HIP in place when a property is marketed remains to be seen.
Paul Grindrod
Partner, Brooker Alexandra Speed
Brooker Alexandra Speed do provide Home Information Packs for clients at competitive rates. For further information, please speak to either Paul Grindrod or Amanda Perrotton on 01344 862111.
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