December 2007 / January 2008

HIPs — all properties are go!

Why the CLG have  now extended Packs  across the board — and the implications for your business...

HOPES that the present hiatus might last were shattered by the announcement of Friday, December 14 as the date for Home Information Packs to be introduced for ‘everything else’ — oneand two-bedroom homes and studios.

The earlier suggestion of a more extended delay had been widely welcomed. It was based upon remarks from a junior Minister who hinted that the final extension of HIPs would be held back until the market stabilises.

With prices reportedly falling, instructions definitely dropping, and uncertainty all-pervading, few had any idea when true stability might return. Best guess was well into next year, say March or April – that was the optimists speaking. Or 2009, possibly 2010 – according to the Jeremiahs among us.

Nobody believes that there will be a stable market before Christmas, and yet the Government has set the final HIPs implementation date.

So who is to blame for that? The answer is Europe Economics and Dr Peter Williams – the outfit who were jointly responsible for the original analysis in July that told Ministers HIPs were still a good idea and that any adverse impact on the market would be short-lived and marginal. So the roll-out started.

Now everyone — excluding a few die-hards in Whitehall — realises that HIPs are a bigger waste of time, money, and effort than even their strongest critics had anticipated. At a recent conference, talking about the future of our business, few delegates had any interest in HIPs. Apathy reigns.

These were senior agents from medium- and larger-sized agency groups, yet just two have had one single buyer take a copy of a HIP. And all agreed that solicitors were showing no interest whatsoever at best, or being positively hostile to estate agents meddling in their business.

So with HIPs a flop, causing unnecessary confusion, and contributing to the market deterioration, and with every professional body – apart from the Association of HIP Providers (I wonder why?) – warning the Government not to make matters worse, what has the Department done? It has gone back to Europe Economics and Dr Williams and asked them to have another look!

This they have done. In a further Appendix to the original inconclusive waffle, they have opined that HIPs are only slightly to blame and that any adverse effect will be short-lived and marginal. Hence there is little point in stopping HIP implementation, better to go ahead quickly. (To read this report go to http://tinyurl.com/ypf43l — start at page 70.)

What the Department has actually done is put back the date when First Day Marketing must stop. The Home Information Pack (Amendment) Regulations 2007 simply says for ‘January 1, 2008’ read ‘June 1, 2008’.

In many cases, assembling HIPs is taking far too long. But do the civil servants care? No, they deal in numbers and that stupid report says that the effects are marginal and that on average HIPs are being prepared in just a few days.

If 90 per cent are ready in five days, where is the problem? Who cares about the 10 per cent not ready so quickly? They don’t, and certainly their Ministers don’t.

Yet if you are the owner of one of these few properties where HIPs are causing real problems, what can you do? The law does not care about individuals.

As an example, I have heard of problems where would-be sellers are in financial trouble – serious trouble forcing them to sell their homes. Yet they fail a credit check and the HIP providers will not prepare a HIP, so the agent cannot lawfully put their homes on the market.
Sure, we are only talking about a few people, so what? But of course estate agents do not think like that. Our job is to help, and to help everybody.

What the Department has done is to move some of the leasehold documentation from the mandatory list to the optional list. Great! Are buyers’ conveyancers going to be able to exchange contracts without this information? Of course not. So what good is that?

And with searches? Here it has asked Ted Bearsall, the deputy chief executive of the Land Registry, to look into the problems and make suggestions. Oh dear. With the Inter-departmental Group for the Simplification of House Purchase we had this one sorted. That was over 20 years ago. I know Whitehall moves slowly, but 20 years!

As for the fact that with HIPs even the buyers’ solicitors could not care less, whether that is because they genuinely have little confidence in the efficacy of the Packs or sheer bloody-mindedness that the Packs leave them with so little work to charge for, I am not sure.

They argue about the integrity of personal searches, yet the conveyancing industry ran happily enough on personal searches until HIPs started to come into use, which suggests the latter.

Some good news, however, is that there is no ‘drop dead date’ by which all unsold property on the market from before the relevant HIPs became mandatory will itself need a HIP. That is left open for a discussion after January. That discussion has gone back five months to June 1.