The Impact of Home Information Packs (HIPs) - 15th February 2008

WHY USE SARGINSONS HUGHES & MASSER TO PROVIDE YOUR HIP?

 

1. We are regulated by the Solicitors Regulation Authority and we are insured if things go wrong. Companies claiming to be HIP providers are not regulated in any way.

 

2. Some Estate Agents will no doubt provide a HIP on the basis that payment can be made when the property is sold. If your property does not sell and you wish to instruct another agent you will then have to pay for the HIP. The new agent may insist on similar conditions requiring another HIP. This means that you will have to pay twice. If SH&M prepare the HIP it will always belong to you and you will not be charged if you change Estate Agents

 

In an uncertain market of expected interest rate rises following the introduction of HIPs you will be in a more favourable position if you own the HIP on your property.

 

For more information visit:

 

Home Information Packs.gov.uk

In this section

view a sample HIP Pack (This link will open in a new window)

It is now more than six months since Home Information Packs (HIPs) were introduced into the property market and it is possible to draw some conclusions on the way this innovation has affected the market.

The Department of Communities and Local Government insists that HIPs have delivered a real benefit to house buyers and sellers.

Is this the case?

As a practitioner in this field for 38 years I believe the following points can be made:

  1. If only the mandatory documents are included, and I have certainly not seen a HIP containing any document other than mandatory documents, then buyer's solicitors will have to carry out additional searches and require a vendor to produce property information forms and fixtures and fittings list as well as additional land registry documents.

    HIPs therefore cannot be said to speed up the Conveyancing process.
     
  2. Most HIPs are being prepared at the instigation of estate agents who report that very few prospective buyers are asking to see the HIP.

  3. The estate agents are not telling me as a buyer's solicitor at the time of instruction whether or not there is a HIP let alone delivering a HIP to me. This causes actual delay while I have to find out what searches are necessary and what other enquiries I have to make.

  4. There appear to be arrangements whereby a number of solicitors have entered into loose agreements with groups of estate agents for the provision of HIPS by a third party. This seems to me to be a cumbersome procedure when no one is ultimately responsible for the production of the HIP. My experience shows that clients in these circumstances are confused and frustrated when trying to obtain information. The house buying process is stressful enough but these sorts of arrangements only add to the difficulties.

  5. It is clear that some estate agents are charging a fee if the seller does not use that Agent for the provision of a HIP. My advice to the client if I had prepared the HIP is to refuse to pay this and seek another estate agent.

  6. Corporate estate agents may be offering "free HIPs". Nothing is for free. Such an offer is usually available only on condition that a higher commission is paid at the end and that the seller uses an unknown solicitor in another part of the country who pays the agent a referral fee.

  7. Not one client, buyer or Seller has sought any advice on the meaning or the significance of the Energy Performance Certificate.

It is therefore difficult to establish precisely what benefits are being delivered to buyers and sellers in these circumstances and my conclusion, at this stage, is that the HIP as presently constituted, is adding a further unnecessary bureaucratic layer to the house buying process which is being exploited to extract more money from the general public.

 

 

 

 

28th August 2008

Sarginsons Hughes & Masser