Abolishing Home Information Packs (HIPs) – Facts & Fiction

Despite recent rumours and ill informed articles to the contrary, it is still ‘business as usual’ in the HIP industry – for now at least. Since the new Government confirmed that they planned to scrap HIPs whilst retaining the Energy Performance Certificate (they have no choice in this – it’s required by European Directive), there has been constant talk about if and when the requirement for a Home Information Pack will be abolished.

Elements of the press have been particularly irresponsible, claiming, in The Independent, that ‘HIPs have been scrapped’ whilst ‘Voice of the Industry’ Estate Agent Today have prematurely claimed that an order to suspend HIPs has already been signed.

Whatever the reason for publishing these erroneous articles, the result has been to cause confusion amongst both the property industry and the consumer. The Department for Communities and Local Government (CLG) have confirmed yesterday that a HIP suspension order has NOT been signed, yet the rumours have encouraged some home owners to put off selling their properties and, in some cases, ask their estate agents to break the law by marketing their homes without ordering a HIP.

What is clear, once fact has been separated from fiction, is that until CLG say otherwise, a HIP is still required before the marketing of a property can begin. The Housing Minister, Grant Shapps, has previously explained that the new Government will scrap HIPs after a consultation period, which he expected to take around 100 days. Whether it’s possible to suspend the requirement during this consultation period is not completely clear. The Housing Act 2004 does seem to allow the option, but it is accepted that the clause was included in order to provide an ‘emergency escape’ if HIPs proved to dramatically stall the housing market in the early days after their introduction.

As a recent Office of Fair Trading (OFT) report, (OFT report Home buying and selling – A market study) published in February this year, concludes,

it could be argued that HIPs in their current form have a positive impact’ and ‘We do not, therefore, recommend any intervention on this issue at the present time.’

So the OFT, no less, would seem to prevent the use of the suspension clause in the Act, or at least provide the basis for a legal challenge were it used at this late stage.

The HIP industry must accept that the new Government has been consistent, whilst in opposition, in its intention to abolish our livelihoods, and that they will now take steps to carry out their plans. Some of us have planned for this eventuality and started to develop alternative solutions to the current HIP, that offer the real improvements to home buying & selling process that the previous Government failed to realise were achievable. Given the opportunity, we will provide the market driven solutions that the Conservatives claim to support, but any move by the Con/Lib coalition to invoke an immediate suspension will not only stall these entrepreneurially driven improvements, but also cause massive and very real problems for HIP providers and well beyond.

A planned removal of the requirement for a HIP, as reasonably expected given the 100 day consultation we’ve been promised, will allow businesses to wind down or shift the focus of their operations in a structured manner. An immediate suspension, on the other hand, will lead almost instantly to mass redundancy (with its inevitable financial effect on both individuals and the State) and an inability to meet creditor’s payments. Energy Assessors, Search Providers and software firms will be amongst those to find themselves deeply out of pocket, frustratingly at no fault of themselves or even their clients.

It is, of course, just a rumour that an immediate suspension is imminent, and it is surely inconceivable that a new Government would create this type of widespread catastrophe as one of its first acts. Grant Shapps and his colleagues now have an easy decision to make – they can either ruin the lives of thousands of members of our industry, or provide the time and support that will allow us to deliver the market led solutions they accept are required.

Written by Simon Thomas, Managing Director of HIP Matters Ltd and Vice Chairman of the Independent Pack Providers Association.


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29 Responses to “Abolishing Home Information Packs (HIPs) – Facts & Fiction”

  1. Its business as usual unless we’re told otherwise and ofcourse the HIP providers have a vested interest in HIPS continuing and there seems to be one on every corner. All the media hype about up to 10,000 people to be made redundant is masking the real issues that the info in HIPS packs aren’t always up to the standard required by a solicitor and this is probably the area that needs looking at or reviewing. What worries me is that the HIP industry is very new – companies arrived from nowhere in a matter of weeks – what were all these people doing previously? Were they all on the dole?

  2. On the surface, the HIP industry appears fractured, with a multitude of groups/trade associations offering varying levels of service and standards. There’s clearly room for reform and improvement.

    That said, without a well thought out replacement waiting in the wings, hastily eradicating HIP’s would be a backward step for the housing market.

    Simon – you mention that a number of parties “will find themselves deeply out of pocket”. Given that EPC’s are set to continue (& potentially expand), can you explain why energy assessors might fall in this group?

    Furthermore, can you outline some of the improvements to HIP’s that you would recommend?

  3. I contacted Grant Shapps directly, i received an email back from his PA (Tim Collins). He stated that Mr Shapps would get back to me this week so, i wouldnt be at all surprised if we heard by Monday that the plug has been pulled on the HIPs.
    In my opinion this would be a great move to speed up selling, encourage home owners to be grteen and reduce the cost of selling a property. An EPC at £40 is much easier to swallow than hundreds of pounds for a HIP ( especially as the only useful thing in the HIP is the EPC

    The HIP is dead, long live the EPC!

  4. Hi NHUK

    Production of EPCs shouldn’t alter too much in terms of quantity, but there will be renewed competition over who produces them. DEAs who’ve been working for HIP providers may well find that those HIP providers disappear overnight, leaving the DEA unpaid (we’ve just paid all our indie DEAs up to date!). Those HIP providers who want to stay in business will try to retain their existing estate agency clients but, with the price focus falling entirely on the EPC instead of the HIP, EPC fees are set to be squeezed even more than they are now.

    Regarding improvements to the HIP, we will shortly launch a product that provides all the information that a buyers solicitor will need in respect of the specific property. Some houses need Coal mining searches, others might need Environmental information, for example. An experienced solicitor will decide, right at the start of marketing, what information he would require if he were acting for a buyer, and this is what we will provide. This goes well beyond the ‘exchange ready packs’ that have been promoted by some providers and, with the solicitor acting for the vendor being instructed from day 1, will genuinely speed up the process.

    With the up-front cost being no more than the price of an EPC (which will be required anyway) we see this as a very attractive proposition, whether the HIP as it currently stands is involved or not.

  5. NewHomesUK,
    Many Domestic Energy Assessors have seen the fees for EPCs reduce dramtically from the promised £70 or more suggested by the training companies, to the £25 being oferred by many EPC Panels. Because of this, many DEAs have taken to suplementing their income with by providing HIPs as an extention to the services they offer, and will see a significant drop in their incomes if they cannot provide HIPs.
    Most HIP providers will agree that HIPs are not perfect and that some elements need to change, but given the choice between scrapping and changing HIPs, I suspect most of the industry would welcome change if it meant keeping their livelyhoods.

  6. Liam Madigan Says:

    Simon Thomas what you dont realise is that it is a critical time of year for people to market their houses. If it is confirmed that the HIP’s will be slowly phased out then people will delay the decision to market their houses by months and it will have a detrimental effect on the WHOLE housing market. Look at the bigger picture, the Tories made it clear a long time ago that they were going to scrap these over-priced un-useful packs. Any HIP providers with an ounce of common sense would have prepared themselves for this eventuality accordingly. I am in favour of EPC’s but am very happy to kiss goodbye to the HIPs. I feel really sorry for all those people who have forked out alot of money over the past 3 years for nothing.

  7. Gráinne Gilmore Says:

    Most people who are about to spend hundreds of thousands on the biggest investment they will probably ever make will not baulk at spending a few hundred quid on a survey to make sure they are not landing themselves with a lifetime of repair bills. They need a surveyor who will climb ladders, crawl into cellars and look up chimneys to give them a detailed report. This was never on offer under a HIP, and anything less is a waste of time. Good riddance, I just hope that the coalition government make a decision asap in order to prevent more people paying this unecessary upfront cost. I do not like the thought of people within the HIP industry losing their lively hoods and the previous government should hang their heads in shame regardless of the abolishment timescale

  8. here is a thought…

    how about we adapt the HIP and improve it.

    we could add a survey, we could call it .. let me think..

    yes, a home condition report, HCR for short. Has a certain ring to it, as if i have heard it before.

    the concept of the HIP is good, just modify until we have what we want or is that just common sense

  9. Liam Madigan Says:

    Yes..just add a survey…then the mortgage company will conduct a further survey…then once the HIP searches expire (after 3 months) the coveyancer will conduct further searches anyway… The only part of the HIP that is useful is the EPC. HIP’s do not need adapting or improving they need scrapping and forgotten about. In the horrid timespan I have dealt with HIP’s it was very rare that a homebuyer has asked me for a copy of one. Quiet strange as the things were invented for their use.

  10. baby and bath water Says:

    so within days of tories getting in baby is thrown out with bath water. Leave it a year or 2 and tories will have idea of a sellers pack or similar and it will be a great idea.

    You will then find the main stream spoon fed media and TV presenters will follow in pronouncing a relevation.

    So what will we do now?

  11. Peter Bishop Says:

    This has always been a way of job creation, providing something that was not wanted and now the same parasites want 100 days of fees without any care about the people who would be paying for nothing

    The concept of HIPs was not good. If it was people would have bought it without being forced to.

  12. Been doing HIPS since the start. Would have prefered to do just the EPC, but on a handfull of occasions (<5%) the searches have identified issues early,have been really usefull and stopped chains falling through.

    The idea that the market will drive a volantary replacement is wishfull thinking, in all but 99% of cases.

    We knew this was coming (unless you buried your head in the sand) and we all have to move on. Circumstances change (we even have a new government) and we must adapt.

    Lets get rid of the blame culture – why would legal action be necessary if HIPS are suspended, when we knew both the Tories and Lib Dems would scrap them? The majority did not vote Labour. (I didn't vote for any of these three this time! but did vote).

    Lets all pull together and get Britain back in business.

  13. Douglas Reid Says:

    Good riddence to them and I truly hope they will be removed. Just another expense to deal with and nobody I know wants them.

  14. So this looks as if it could be the first compensation claim against the government. How can they suspend policy? with good reason, backed up by evidence. So where is the evidence? no where i would suggest.

  15. If they are scrapped does that mean as a FTBer i will have to pay for the information. Doesnt seem a great idea getting rid of them to me 🙂

    It is hard enough trying to get on property market as it is, thought politicians said they were going to help FTBers. Seems old politics to me Tories helping rich not those trying to get going. Whats next increase in interest rates and return of low level stamp duty?

  16. first cuts Says:

    so jobs related to HIPs are the first cuts to be made. God help this country, the guys are power crazed with no thought towards their actions.

    My thoughts go out to those who are about to lose their jobs.

  17. The coalition is working fast to unravel labour policy. It will be interesting to see what further policy changes are put in place. As to those complaining – these policy shifts always happen when a new government is elected. There is no redress except through the ballot box. I really wonder how many people will be caught out by this – only those with heads in sand approach to life?

  18. Happy, but... Says:

    An easy and obvious target people would say, but that’s only because it was such a badly implemented piece of legislation. The heart may have been in the right place back in 2006, but it was very clear by the time it was put in to law that it was never going to achieve it’s intended goals as it neither added value to the process or ever gained the full backing of any of the stakeholders in the buying and selling process.

    Whilst I am, as you would say, anti-HIPs, I do have to dispute what other nay sayers have been…saying. This will not be a magic button for the housing industry, a sunny weekend for all those prospective homebuyers will have more of an affect on the market than any of this phericpral red tape. No, the suspension of HIPs will make not one jot of difference today, tomorrow, or the week after. That was always the problem, it added nothing to the process and now takes nothing away. Check back in a few weeks and everyone will have forgotten about the whole pack issue.

    Except, of course, those in the HIP industry who have been left in the lurch. I take no pleasure or satisfaction knowing that peoples livelihood will be directly affected by this statement today. I don’t blame the new coalition for that, there really was no other way of reversing this other than to stop it in its tracks, ambiguity would have amounted to torture.

    Nobody is saying that the buying and selling process is perfect and it does need re-invigorating, but this should have been technology lead, not by creating an even greater paper trail. We need to have fully electronic local authorities who can turnaround search requests in days, not weeks as it right now (we were promised this back in 2005). The Land registry should have continued looking into the ‘online matrix’ and lenders really should be working closer together to share standards across the board. These are the issues which have been sidelines and starved of money while we created an army of DEAs.

  19. Phil Smith Says:

    HIP, HIP HOORAY!!

    At long last the total waste of time HIP and all the associated “none jobs” bite the dust.

  20. Complete waste of time and money another crazy Labour idea. Thank god they have gone. People who signed up to do this type of work have been making an easy living and few hundred quid for a couple hours work, complete joke. Most people conducted this work P/T or as an addition to there other job…..welcome back to the real world. Fantastic news..Well done the government!!

  21. I must say i am deeply sorry still for the problems i have caused. All these issues will wash through in the next 15-25yrs. Any way i am off to retire and let these boys sort out all my mess(funny smile on face). Ps dont vote Labour..

  22. Gary Santo Says:

    I read with interest the above remarks to those of you who have slagged us off please think of this, some of us have scrimped and saved to train for what we thought could be a new star.t Myself I was unable to carry on the work I was doing because my health was fading, so I sold my Caravan and anything else to try and train for a better life. How dare you people accuse us of thinking it,s an easy way of earning a pound.
    Gary Santo………DEA

  23. Gordon Brown Says:

    Dear Gary Santo , sorry but you are no longer my problem thanks for voting for me though. Atleast you made a good killing from the scam whilst it lasted eh? Love your former prime minister x

  24. Phil Smith Says:

    If the HIP had been fit for purpose and included a survey or at the very least, a valuation then it might have survived.

    Fact is that the HIP’s on both the house I purchased and sold last year were read by no potential purchasers and the information in them not relied upon by either conveyancers!!

  25. Is a shame and a easy target by this new Government to show some clout. The EPC will be still needed and as others have said DEAs are still out there to provide this service. Direct suppliers may suffer as the EA will just give it away, and force fees down to levels that cant be realistic for an independent business. So i urge sellers to seek out local DEAS direct to give them the service they need at a realistic fee.

  26. Peter Bishop Says:

    Its not showing clout but sense to get rid of HIPs.
    As far as the EPC goes most people can count their own light bulbs.
    Lets have real jobs not imposition and artificial job creation.

  27. Whatever people think of the HIP, or of the way it’s been scrapped, can anyone argue against the principle of providing up-front information about such a big purchase? Not really. Some will say that buyers should do their own research, but why have multiple people researching the same thing repeatedly, each incurring additional cost, when the information can be made available at a single source? Buyers will still have to take ultimate responsibility for their decisions, but less time & money will be wasted in the process.

    Arguments against the HIP vary, but no-one has argued that the principle of providing information for prospective buyers is a bad one. If GS thinks the HIP has the wrong information in it, then why not argue for the right information? Some have argued that it failed once the HCR was omitted … why not re-introduce it if that would help?

    The Tories accept that the whole system needs reviewing. This demonstrates that they don’t know how things should be improved, just that they should. If they accept that change is required, but don’t know what that change should be, why on earth are they making the changes that they accept they don’t understand? Surely a review is required before a change, not after it (GS’ own staff admit this is absurd).

    Anyway, what’s done is done. The industry will demonstrate that there’s a better alternative that the HIP could have been developed into – many of us have been working on it for some time. We will end up with the right product – Grant Shapps has just ensured that it will be done in the most disruptive way possible, with lives ruined and businesses destroyed. He has also, quite possibly, triggered the start of the 2nd part of the double dip house price crash. What a great way to start the new parliament – well done Grant!

  28. What about people like me, i put my house on the market 3 weeks ago, paid 399.99 for the HIP and now it has been suspended, do I get my money back.

  29. Peter Bishop Says:

    The UK’s biggest estate agency Countrywide said it had seen a 34% rise in the number of people selling their home after the announcement (to scrap HIPs) source Sky News

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