Scrapping Home Information Packs – Ins & Outs

The Conservative and Liberal Democrats have published their initial coalition agreement which will be followed in due course by a final coalition agreement.

The Lib-Con Coalition Agreement published makes reference to Energy Performance Certificates and Home Information Packs under section 11 on the environment.

The agreement states;

“Retention of energy performance certificates while scrapping HIPs.”

So what does that mean for Home Information Packs (HIPs) future?

Home Information PackFor now it indicates uncertainty and as has been made abundantly clear during the election campaign; uncertainty is rarely good for anyone.

It is of interest that the Home Information Pack reference is not ‘grouped’ together in the agreement with civil liberties and points regarding a repeal bill in section 10. David Cameron mentioned in a pre-election interview that he would put forward a “great repeal bill” soon after being elected.

This would scrap ID cards, home information packs and dozens of rarely enforced criminal offences introduced by Labour over 13 years.

Does this still apply with the new arrangement with the Lib Dems or has its priority and impact been re-evaluated?

The HIPs’ reference is there but its significance, the intention and immediacy to act upon is far from clear.

The past and problems faced by Home Information Packs (HIPs)

Unfortunately, it is a story of vested interests where those opposed have vested interest in the demise and those in favour vested interests in their success. (Yes, we supply HIPs direct, we are not a re-seller so have an interest in their success.)

Those who are anti-HIPs soon gained or already had a good relationship with the Conservatives and this translated into wide spread media dislike for the packs from the outset. The media (uneducated on the subject; the BBC election channel even made factual errors yesterday) ran with the anti-HIP hype which rubbed off on the general public.

From our experience the publics’ initial opposition has massively weakened as they have slowly learned and gained the benefits of the HIP to the point where they are generally widely accepted. With a little explanation most can see the concept is sound even if the implementation has left a lot to be desired.

Whilst ‘people’ have undoubtedly learned about certain aspects of the HIP; the main concept still appears to have been lost and this has got to be acknowledged as a failure by those in support of and promoting the HIP.

The HIP is a vehicle to supply upfront information about a property for sale.

Both pro and anti HIP groups can argue regarding the validity and value of certain documents within a HIP. However, it is hard to disagree that the concept of having information about the biggest purchase of our lives before we are expect to commit to purchase, is ultimately sound.

To suggest we would remove upfront information about other purchases or activities would be deemed an outrage to the rights of consumers.

Imagine…

The food industry saying, ‘Yes, we will provide nutritional information regarding food, but only once you have bought it, or even better once you have eaten it.’

The car industry saying, ‘Of course we will tell you what tax band the vehicle is in and the MPG you can anticipate, but we need you to commit to buying first.’

The local school saying, ‘Yes, there was an OfSted report recently carried out on our school, but before you can read it we need you to enrol your child in our school.’

An appliance retailer saying, ‘Yes, we have the energy rating of this fridge. We will give you details once you have paid at the till.’

The impact if they scrap HIPs

It is likely that property conveyancing costs will rise to pre-HIP levels and the fees that are currently being paid to HIP providers will simply revert to being paid to conveyancers.

We have previously looked at detailed issues relating to scrapping HIPs of which we have yet to see any strategy being put into place to tackle.

Whilst those blinded by the anti-HIP hype and those with vested interests revel in the home information pack being abolished, spare a thought for the thousands who will lose their jobs. It is estimated there are approximately 10,000 directly or indirectly involved in the industry.

It will most likely give rise to companies and individuals who have invested large amounts of time and money to seek compensation from the government.

So should I still buy a HIP?

We discussed whether the Conservative Home Information Pack policy would stall the property market? back in December 2009 and gained a response from the then shadow housing minister Grant Shapps on how he would consult on Home Information Pack Policy. However, the response was far from conclusive and further answers were not forth coming.

All we can say is at present, a home information pack is still legally required to market your home for sale. Whether this will be the case tomorrow, a months time, six months time or in four years time it is hard to say.

Should I wait to sell my house and save the HIP costs?

That really is a decision you will need to make yourself though you should consider…

… by not selling now when I want to and saving HIP fees …

  • will I pay more for conveyancing ?
  • will VAT go up ?
  • will the cost of the house I would like to buy have increased therefore the cost to change will have increased?
  • will stamp duty fees rise?

Waiting to enter the property market until the government scrap HIPs  may prove to be a false economy. You could also question putting your life on hold for a few hundred pounds when you consider other related costs in the buying and selling process.

If Lib-Con coalition scrap Home Information Packs what next?

Again, there is no answer at present though the home buying and selling process has never been deemed ‘acceptable’ and is likely to receive another review if HIPs are completely scrapped and not adapted.

If this is the case expect the anti-HIP parties to step forward again to protect and promote their vested interests and a ‘new sellers pack’ to come to the forefront.

It has been rumoured TV star Kirsty Allsopp will be prominent as an adviser to the new government though it is yet to be confirmed if Nick Clegg would actually prefer Phil Spencer.

How quickly can they scrap HIPs?

Unfortunately for everyone involved in the industry or considering buying or selling it is unclear. There is lot of  speculation in regard to what is legally possible and what process is required to suspend or scrap the HIP.

The speculation ranges from immediate suspension to previous statements that the intention would be to hold a consultation before any changes would be made.

With the country in an apparent reported state of financial and economic fragility and the challenges which are undoubtedly ahead; it does raise the question of whether those closely monitoring the HIP’s future are being too insular. Would the Home Information Pack be a high priority if you were the new Prime Minister?

Time will tell, though indecision and uncertainty on the issue does not seem a good environment which would be allowed to form and foster.


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13 Responses to “Scrapping Home Information Packs – Ins & Outs”

  1. Anyone who does not sell due to waiting for HIPs to be scrapped is nuts. HIP = 0.2% of total cost of buying and selling.

    It is likely to be at least a year before any serious action is taken

    Media 5 – Sensible regime 0

  2. wyndham hopkins Says:

    i will be waiting before selling my property,so am i nuts,i would rather pay to sell out of proceeds rather than pay up front and lose the hips fee,because nobody could match my asking price,saving about 300 pounds plus vat seems completly sane to me.

  3. jonathan scholes Says:

    you need to remember wyndham, that should you be buying another property and HIps are scrapped, then you will be saddled with paying your solicitor to carry out searches to the local authority and the water companies, office copies from the land registry and increased conveyancing costs to carry out hese tasks.

    therefore you would not be saving any money at all if HIps are scrapped.

    your passage is another example of an ill informed conclusion – maybe you should become a politician!

  4. Chaos causer Says:

    Well done to the tories.. a week into their government and causing complete uncertainity in the property market. They have had years to plan and now stumble at first hurdle and can not make a decision.

    You can not mess with an industry and peoples levelihood like this. O yes you can, i believe you did with miners, watch out North East they will be at it again

    Be a good day when Vince Cable brings them crashing down.

  5. there seems to be alot of speculation going on, with claims of this and that but cant find anything solid. Are they suspended or not?

  6. I have had a HIP provider at my address tonight and they have recommended not getting the HIP done as they believe it will be officially scrapped within 7 days and are advising their clients to wait. They stated that the EPC will still need to be done though.

  7. Hi Millie

    Can i just confirm it was not us that advised you to hold off with the HIP.

    I can only speak for ‘us’, however most HIP providers wont be insured to offer advice on when and if you should market your property.

    Imagine a scenario where you hold off legally marketing, waiting for HIPs to be scrapped and the market tumbles by say 10% or VAT goes up and HIPs stay. Will you be able to claim from the HIP provider for the amount you would have ‘lost’ from waiting?

    There is uncertainity at present, however at the time of writing you do need a HIP to legal market your property. The last official information we had from Grant Shapps office was that they would hold a consultation (see http://www.hip-consultant.co.uk/blog/conservatives-to-consult-on-home-information-packs-hips-123/ )

  8. We have spoken to DCLG today regarding possible suspension of HIPs. DCLG confirmed that the rumour that(over the weekend and Monday)HIPs would be suspended and an ‘order’ had been signed is untrue. A DCLG spokesperson told us they did not know where this ‘claim’ came from and appeared to them as pure speculation.

    We are not going to speculate on where these rumours may have come from, however it is clear they help to provide a de-stabilising affect which does not help home buyers and sellers.

  9. I have no vested interest in this (not being a Hip Provider or seller) but I have been reliably informed that an order has been signed to scrap HIP packs. I wish people would stop speculation that conveyancing costs will increase as this is not the case. Solicitors are frequently having to replace documentation in HIPS packs anyway because searches are often considered out of date or inadequate which is increasing costs to the purchaser who if they are also a vendor will have paid for a HIP pack and then find when they purchase that are paying for much of this work to be duplicated.

  10. Hi Alan,

    “…. but I have been reliably informed that an order has been signed to scrap HIP packs.”

    Would you care to share by who? as the DCLG told us it was rumour and speculation

    The Law Society and solicitors are considered by most as having a vested interest in the home buying and selling process

  11. It’s lucky I’m not a solicitor or involved in the conveyancing process then. Just firmly believe the public have been ripped off for long enough with HIPS. Of course HIPS providers and personal search agents wouldn’t have a vested interest in this either.

  12. Clearly the DCLG didn’t know what they were taking about

    http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article7131575.ece

    My dissertation concluded that the HIP was a waste of time, money and would not speed up the selling process. I also concluded that it should not be brought in having spoken to estate agents, chartered surveyors and solicitors. Thankfully, someone saw the sense in my arguments.

    I think the only place where a HIP is necessary is for auction properties.

  13. There are many alternative of the HIP in the market but among all them the HIP is more advantageous and helpful in many process.

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