The soap opera that is HIPs has
now been running for a decade
and regrettably shows no sign
of running out of story lines.
The extraordinary fact is that after
all the thousands of hours of
consultations, debates, forums,
seminars, and the miles of column
inches of articles and media
comment, the Home Information
Pack has ended up as an abject
failure. Has there ever been a
piece of legislation that promised
so much and delivered so little? I
cannot think of any.
The irony of the HIP is that during
its tortured gestation those who
attacked the pack proposal were
branded ‘vested interests’; against
all change, maintaining the status
quo, and ‘profiting’ from the failures
of the home buying process.
Now that it is born, New Labour’s
bastard love-child, sired by a
succession of dogmatic Housing
Ministers, is supported by other
‘vested interests’ which profit from
the pack.
The ‘antis’ always had businesses
if the pack failed to materialise but today’s vested interests will be out of
a job if the pack disappears – as it
will when the Conservatives win the
next election. No wonder there is a
note of desperation in their ‘bigging
up’ of the HIP and its supposed
benefits. The reality is that the HIP in
practice is daily failing to deliver on
its promises.
Let us remember what the pack was
supposed to achieve. In 1998 the
Government’s stated targets for
home buying were to speed up the
process, give greater transparency
and increase certainty.
By reducing the fall-through rate,
abortive transaction costs would
fall and the whole experience
of home buying would become
less stressful. How is it that such
laudable and simple goals have
been so spectacularly missed?
Part of the answer lies in the failure
of Government to properly engage
with the property industry to develop
the proposals. Ministers would deny
it but it was clear to anyone closely
involved in dealing with the HIP
proposals that Government policy
would override practicality and that
‘consultation’ was a fig leaf to cover
what had already been decided.
The louder the criticism of the pack
became, the deeper the Government
dug its defences. I formed an
irreverent vision of Yvette Cooper
with hands clamped over her ears,
stamping her feet and shouting ‘I’m
not listening, I’m not listening’ as her
civil servants tried to tell her the pack
wouldn’t work.
The nature of the HIPs debate
dramatically altered when the
pack was chosen as the vehicle
for delivering Energy Performance
Certificates. To criticise the
proposals was now to be not only
a ‘vested interest’ but also to
be against measures to combat
climate change. EPCs muddied the
waters and conveniently diverted
attention away from improving the
buying process.
Constrained by the EU Directive
requiring EPCs to be implemented
and in the absence of any other
viable delivery mechanism the Home
Information Pack had to be introduced
– and never mind whether or not it
actually improved the home buying
process. In effect the HIP had been
hijacked by Brussels bureaucrats.
Fast forward to the present day. So far
as I am aware there have been only
two claims for the success of HIPs to
date. One is that search fees have
been reduced in some areas. The
other is that the pack is responsible
for reducing transaction times by a
few days. Forgive the sarcasm if I say
I am underwhelmed.
Forcing sellers to pay several hundred
pounds for a pack in order that some
search fees are shaved by a few tens
of pounds doesn’t make economic
sense and as for the alleged reduced transaction times, where is the robust
statistical evidence – preferably from
an independent source rather than
the pack providers?
There are those who would like to
think that the pack has revolutionised
the marketplace. I deal with sellers
and buyers every working day and
can say with total certainty that after
all the fireworks of the last ten years
the pack amounts to a damp squib.
Vendors shrug their shoulders
when told they have to pay for
the HIP – seeing it as little more
than a stealth tax; applicants never
ask to see it before going to view
properties; and solicitors, after an
offer is accepted, if they ask for
it at all, largely ignore it and get
on with taking up enquiries and
commissioning Official searches.
The Home Information Pack simply
hangs as a useless and expensive
albatross around the neck of
the property market contributing
nothing to transparency, speed
or certainty in the home buying
process and failing to alleviate any
of the stresses.
I know that some agents are now
treating HIPs as a revenue stream
but if anyone is having a better
experience of the practical effects of
the pack on buyers and sellers I’d be
fascinated to hear from them.
The recent consultation by CLG on
the proposal to include a Property
Information Questionnaire and
Leasehold Summary in the HIP
suggests that they have recognised
that the pack has failed.
In principle the PIQ is a good idea
and drawing together leasehold
information early in the selling
process is sensible but would it not
make more sense to let the PIQ take
the place of the HIP and go back
to having buyers commission the
searches after acceptance of offer?
SPLINTA has proposed this in their
response to the consultation but has
also restated that a root and branch
reform of home buying is required
if we are to obtain substantial and
cost-effective beneficial change. The
PIQ, like HIPs, merely tinkers at the
edges of the process.
Leaving EPCs out of the equation, if
there was an opportunity to go back
to the drawing board we should be
considering:
- A coherent databank of Land
Registry, Local Authority, Utility
Company and Environmental
Agency information that can
be accessed by a purchaser or
their legal advisor at the touch
of a button.
- A Review of the current
adversarial system of
conveyancing leading to a
simplification of the process, to
the point of removing ‘caveat
emptor’ and introducing a
notarial system of property
transfer.
- The development and introduction
of e-conveyancing.
- A national protocol for precontract
deposits to be put down
by sellers and purchasers at the
time an offer is accepted – such
monies to be applied to abortive
costs of either party if one
withdraws from the transaction
before exchange of contracts.
- A national protocol for binding
pre-contract ‘lock-out’
agreements that restrict a seller’s
ability to treat with another buyer
after an offer is accepted.
- Buyers to be required to make
full disclosure of their finances
for purchase at the time an offer
is made.
It is worth recalling the words of
the 1998 Government research
document that spawned the Home
Information Pack.
It said: ‘There is a need to better
balance the risks of the transaction
between buyer and seller’. I venture
to suggest that following through
on the suggestions outlined above
would go a long way further in
meeting this need than HIPs alone
will ever achieve.
Nick Salmon is head of SPLINTA and is Commercial Director of Harrison Murray Estate Agents.
What is your experience of HIPs? Is there a member out there who has a positive view? Or is it universally disliked?
