A year after their introduction, house doctor Peter Fall looks at Hips and is unimpressed.
IT has probably escaped your attention but the residential property industry is not particularly enamoured with Home Information Packs. (Hips) Heralded by the Government as the saviour of the cumbersome house-purchase process, Hips would do away with delay and prevent gazumping. Homebuyers would have more information at the time they view the property and so would make a reasoned assessment and therefore a bona fide bid.
Excellent ideals but has it happened? Well no, the property purchase process has slowed down not speeded up. The time taken between putting in an offer and completing the sale has gone up by three weeks not down. As for gazumping, the market, not Hips, has got rid of that and replaced it with its alter ego, gazundering.
For those of us not too familiar with the terms, gazumping is where the seller waits until a couple of weeks before the sale is completed before telling the buyer that they have received a higher offer and if the buyer doesn’t match it then the sale is off.
Gazundering is where a couple of weeks before completion of the sale, the buyer tells the seller that their valuation/survey has identified problems with the value or defects in the house, so they can’t complete at the agreed figure. Instead they must knock a few thousands off, for it to go ahead.
Both are nasty tricks and both are motivated by greed.
As for the Hip itself, I keep finding properties up for sale with no pack available. The regulations are that there must be a Hip available before the property is put on the market or at least it must have been ordered. I viewed two large country properties last week, neither of which had a pack available. Any large property brought to market since last August should have had one. One agent tried to tell me the property wasn’t properly on the market. The other said the Hip has been ordered but wasn’t available.
I suspect there are a large number of houses where the Hip has been ordered but not yet delivered. Most prospective buyers wouldn’t know how long it should take to get the pack. (In my experience, a couple of weeks is sufficient.) I think the agents know the market is slow and fear that many properties could be taken off the books before an offer is received, so they are saving the costs until they have a serious offer and can produce the pack.
But what about those properties that do have a pack available to the buyers? Does it make any difference? I don’t think it does. I did a survey of a leasehold flat the other day. Taking care to find out who is responsible for the repairs in the block, I asked my client and then the seller for a copy of the lease. My client hadn’t seen one and the seller didn’t have one so I tried the solicitors. Eventually the Hip turned up with a copy of the lease. It was news to both the seller and the buyer that it should contain the lease. Certainly my client hadn’t seen the pack, other than the energy performance details displayed on the brochure. So how could my client make a reasoned assessment and then a bona fide bid without understanding the legal implications? The end result was the bid went back into the melting pot, until the implications of the lease liabilities were factored into the amount they could offer. So what was the point of the pack?
One year down the line I have to say to the Government that this isn’t working. Not only did you mess up the launch but the product doesn’t do what it was supposed to. It’s time you got off your high horse and sat down with the industry to revise the Hip into what will be a benefit and not a burden to the people that matter, the ones buying and selling their homes.
Peter Fall is former president of the Royal Institution of Chartered Surveyors. He is managing director of Clear Building Survey, tel: 0800 072-9003 www.clearbuildingsurvey.co.uk
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