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The End of HIPs: Where Are We Now?

Cast your minds back to 1996 BC ( Before Coalition) and a singular Labour MP got mightily angry about being gazumped on a property because of the delay in achieving an early exchange of contracts.

His solution: more information available about the property at the time of viewing rather than after making an offer.

The rationale being that the sooner an exchange can be achieved the less stressful the whole selling and buying experience. Nothing controversial there then!

This idea was given more meat by the new labour Government with their embryonic proposals for a Seller’s Pack. The Seller’s Pack would include all legal documentation, searches and a Survey, a so called Home Condition Report on the property.

Over the ensuing years, the debate continued. Fears were expressed about the veracity of a Survey commissioned by the Seller of the Property, and the Lenders were not at all pleased that they would be unable to use their own Valuers.

Watered down and beleaguered, the Seller’s Pack morphed into the Home Information Pack which became a cornerstone of new Labour Policy after the 2005 election.

Everyone at the time from Estate Agents, Conveyancing Solicitors and Surveyor’s agreed that reform of the home buying process was needed, and changes in the right circumstances could be introduced.

Unfortunately, the Government in the arrogant approach which defined their later years in power decided not to consult and take on board the suggestions of the National Association of Estate Agents, the Law Society and the Royal Institute of Chartered Surveyors.

For you see the Government had discovered Energy Efficiency and the Green Agenda.

A European directive required an energy performance certificate for every property. Therefore, never mind reform in the home buying process, we want to protect the planet. The HIP as it had become to known was the vehicle to enforce the directive.

The thrust was changed and the then Housing Minister Yvette Cooper was lauding how the HIP would allow every one to benefit from information about the energy efficiency of a property and how this would be a boon to First Time Buyers especially.

I even naively suggested to the Minister at a conference that abolishing Stamp Duty for first time buyers would be of greater benefit. Well at least the Government saw sense on that one in the end.

The HIP has been with us since August 2007 in various guises until its summary suspension on the 21st May

Opposition has been fierce, most of it justified some of it tosh (it has enabled a quicker exchange in the right circumstances)

So the Coalition has moved quickly to cast aside HIPs. It is a shame that as usual when something is done for political reasons that the law of unintended consequences kicks in.

The redundancies that will follow will not just be in HIP companies (The Government incorrectly assumed that HIP Inspectors as they call them will still be able to carry out the Energy Performance Certificates). The EPC is but one component. Also at risk are the Personal Search Companies that mushroomed under the legislation. Most Conveyancing Solicitors including myself will now revert to commissioning local searches directly from Local Authorities

We will have to wait and see whether reform in the home buying process will now grind to a halt.

The benefits of having a legal pack of some sort available but with more relevant information including a draft Contract, Transfer or Title Deeds and all relevant planning Permissions is commendable.

To win the hearts and minds of the public and to achieve take up, I think it must be available on the same “no sale no fee” basis that is the norm in the Estate Agent industry. Time will tell.

It is perhaps ironic that the threat of gazumping is still with us, true reform in the Conveyancing process on the back burner and all that we have that is tangible, is the Energy Performance Certificate.

Not even a twinkle in any politicians’ eye back in 1996.

EPC 123