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Penelope Court, Director, Beauchamp Estates, on the failings of the HIP
As an estate agent I’ve spent many an hour bemoaning the futility of Home Information Packs (otherwise known ‘affectionately’ as HIPs), but in December 2008, when I bought a flat myself, I decided to put my grievances and the validity of the HIP, to the test. I requested a copy of the HIP for the property I was buying, and lo and behold, my solicitor found it to be a completely unworkable document.
Not only did the pack run to some 110 pages, but it was inaccurate even to the point of lacking the correct lease. It failed totally to uncover the fact that certain works had been carried out without the landlord’s consent, which ultimately led to me having to enter into a conditional contract. In short, as expected, the dreaded HIP showed itself to be just as useless, irrelevant and irritating for buyers as it seems to be for us agents. What an absolute waste of money for the vendor.
In my opinion there are three key failings of HIPs – inaccuracy (as above), duplication, and delay.
The original argument for HIPs was to erase gazumping and generally speed up the sales process. However, unless a purchaser has enough time to study and digest the whole package, HIPs really don’t provide any valuable information to influence a sale. No purchaser we have dealt with has ever decided to do their own conveyancing preferring to rely on a lawyer to carry out this process. And so we come across the second failing of HIPS – duplication! HIPs duplicate the information that any decent conveyancing lawyer will, in any case, need to gather and verify on behalf of his client. However, the lawyer will have the benefit of the purchaser’s implicit trust, and demonstrate a higher level of accuracy.
At Beauchamp Estates we concentrate mostly at the top end of the market in prime central London. Many of our purchasers are from the international market and rely exclusively, and in our view correctly, on their lawyer’s advice. Our clients tend to be time poor, cash rich buyers, with limited patience, inclination or, dare I say it, ability to translate the HIP documents – just look at an average lease and try and ask the layman to translate that! They also frequently want to exchange contracts very rapidly – which brings me on to ‘delay’.
Estate agents are now obliged by law to have a copy of the HIP for each property prior to any marketing – which includes viewings. This means we are often able to gather all the requisite information (get the contract agreed and signed, AML in place, photographs, details, even brochures), but still be waiting for the HIP. Potential purchasers are unable to view the property, which is incredibly frustrating for the vendor and the agent.
Remember, HIP providers are a recent invention and as such, despite offering competitive rates, very often fail to deliver the goods on time. They can be painfully slow in acquiring the information required for the pack – our worst example is taking four weeks and counting! Surely it would be simpler all round to instruct the lawyer to prepare searches at the point of the vendor instructing the agent?
To my mind, HIPs cause unnecessary delay in what is currently a particularly challenging marketplace – and in simple terms I would say that in the depth of the recession this delay was responsible for slowing an already sluggish market.
The Conservatives have firmly indicated that should they be elected to government, the HIPs will be abandoned. (The EPC, which is EU legislation and can be compiled at the point of agreeing the deal, will remain). This will hopefully encourage people to put their properties on the market, especially at the lower end, without having to commit several hundred pounds before marketing even commences. Given that there is a huge shortage of housing stock in this country let’s just hope that the Conservatives (if they get in!) keep their word and get rid of this exasperating piece of legislation.