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Homeowners: Wave goodbye to HIPs and hello to £200

The much-maligned Home Information Packs have been ditched by the new Government.

One of the first things the new Lib-Con coalition Government announced was its intention to scrap Home Information Packs (HIPs). So after over 10 years in the planning, only three years in operation and a whole load of time and money wasted, it’s goodbye to HIPs.

Many people will be pleased, including the nation’s favourite property princess, TV’s Kirsty Allsop, who was a fierce opponent of the packs. But not everyone will be so happy.

The thousands of people directly or indirectly employed in the industry, who were assured by the Government that the packs were here to stay, may not be so thrilled to be losing their jobs. Indeed, many people gave up careers and invested in training to become a self-employed HIP inspector when the packs became compulsory -- now they are likely to lose their livelihood.

What’s the story?

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The tale of HIPs goes back so far you can find it in New Labour’s 1997 election manifesto, where Blair & co. spelt out plans to fix the homebuying process. Of course, it wasn’t broken anyway, but never let that get in the way of a good policy.

The idea was that by giving potential buyers a pack crammed full of key information on the property before they made an offer, fewer deals would fall through at a later stage. Things would move quickly and time-wasters would be discouraged.

In essence it was shifting some of the costs of buying -- like searches and valuations -- from the buyer to the seller (who would pay for and provide the HIP).

And importantly, it fulfilled an EU directive to provide energy efficiency information on all properties, which would become one of the contents of the pack.

Now that is the only bit that will stay under new Government plans.

Watered down

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Unfortunately, although the idea was a good one in principle the contents of the pack got more and more watered down over the years. When they finally launched in August 2007 they were, well, pretty useless.

Most of the intended contents had become optional for sellers, specifically the Home Condition Report -- the jewel in the HIP crown -- which was going to be similar to a valuation. Once that became optional, in a last minute Government u-turn, it was pretty obvious that HIPs were doomed.

Indeed the only compulsory things left in the launch packs were a contents page, the energy efficiency report, proof of title and a few pretty lacklustre searches, none of which represented a determining factor for buying your dream home!

For up to £200 a pack, it hardly represented  a great deal.

Confused roll-out

Another problem with the HIPs rollout was the phased approach, which did little to instill any confidence in the system. First they were launched for some, but not all, four-bed homes. A month later some three-beds were added and two months after that smaller properties were added.

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But those who had put their property on the market before the launch didn’t need to get one, leaseholders got away without one for a further six months, and all sorts of other loopholes made it difficult for anyone to know whether or not they needed a HIP, let alone for anybody to monitor the take-up of them. Indeed, when I was househunting in early 2009 many vendors didn’t have them.

HIPS were eventually made compulsory for all sellers but the missing compulsory components meant that the dream of ‘exchange-ready’ packs that contained such comprehensive information that a buyer could have an offer accepted and move straight to exchange of contracts, was leagues away from reality.

In essence they didn’t speed up the buying process because of their watered down state, didn’t stop time-wasters, and didn’t really help potential buyers.

Little wonder then that the Tories jumped on HIPs years ago as a waste of time and money, and as an easy target for political point scoring. When they formed the coalition Government last week it was no surprise they announced they were scrapping the packs.

The losers

Inevitably with a decision like this, there will be those that lose out.

Chief among them are the thousands who trained to work as home inspectors. According to the Association of Home Information Pack Providers, between 3,000 and 10,000 workers will be either directly or indirectly affected by the death of the packs.

Furthermore, it has been pointed out that once HIPs are scrapped property conveyancing costs will rise to cover the searches that were included in the packs -- the local authority searches and water search. What's more, meeting those costs will once again be the responsibility of the buyer.

Deferring the sale

Ever since the formation of the co?alition, there has been a sense of confusion surrounding HIPs. While the Government was clearly committed to scrapping the packs, it had given no timetable for doing so.

As a result there were concerns that potential sellers would defer putting their property on the market to avoid paying for a HIP. The resultant lack of supply could then skew the housing market temporarily, and more importantly threaten the recovery.

Thankfully, the coalition Government has listened to those concerns and acted swiftly, with an immediate suspension of the packs, pending legislation to remove them completely. Energy Performance Certificates remain compulsory due to EU legislation.

The introduction of HIPs was a long-drawn out messy process. Thankfully their demise appears to have been a sharp and short one.

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  • 06 June 2010

    Slight correction to my sentence "Provide a copy of, as below, your formal Complaint/Statement to the EA." This should be read as PROVIDE A COPY TO THE EA, OF, AS, BELOW, YOUR FORMAL COMPLAINT/STATEMENT MADE TO THE HIP/EPC PROVIDER(S). My apologies.

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  • 06 June 2010

    Miami193 you can terminate a Contract at any time, for proveable bad faith AND/OR SUBJECT to the terms (the small print) of the Contract. You say you cannot get rid of the Estate Agent until July? Is that because you have agreed for a sole contract with the EA for that period? And/or have you agreed to continue to market your home with this EA until July? In either case, you can immediately tell this EA, you are totally dissaftisfied with the inaccurate HIP Provider's Report, that they the EA recommended and that all marketing of your home must immediately cease until this HIP and EPC are properly corrected. Provide a copy of, as below, your formal Complaint/Statement to the EA. With regard to the [i]completely useless, false HIP and/or EPC[/i], you should go back to the Report Providers, with a formal written Complaint/Statement pointing out each of the [i]completely false[/i] facts which are claimed STATING WHAT ARE THE TRUE FACTS and invite these people at their own expense, to correct these [i]completely false [/i]claims, or to refund in full the fees you were charged for this outrageous piece of work. If the HIP Report writer has disappeared/gone out of business, get in touch directly with the EPC provider and do the same to this person/Company, requiring a full refund of your Fees paid for the EPC or a properly written and accurate EPC. Going back to the EA, I had not seen anywhere that HIP fees were likely to increase. Rather to the contrary. It was common knowledge that a Conservative Government would be likely to win the then (in April) forthcoming General Election and that the Tories had spoken of abolishing HIPS, as had the Liberal Democrats. So potential HIP fees increases sounds like a bit of churning to create cash for their friendly HIP provider? Secondly, you say the EA claimed to have a Buyer for you as the reason for the unholy haste in obtaining the HIP when you did not wish to market until the month of May? What happened to that Buyer the EA had, where is he/she and why have the EA failed to notify as to how the marketing of your property is going? Such as, you say, "you have heard claims that Buyer's' have been saying the house would be too expensive to run"? Who has led you to believe that this may be a reason why you have had no viewings? If it was the EA you have heard this report from, this is ideal, since it was their incompetent HIP Provider who has given rise to these false and erroneous claims. You can put all of these points to the EA, pointing out that, due to their services, or lack of adequate services and their recommendation, your home has now suffered effectively a defamation/libel and as such the EA have breached your trust and their contract with you, since you can no longer rely upon them and that therefore your Contract with them is terminated with immediate effect. Hope this helps.

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  • 25 May 2010

    I wish I hadnt put my house on the market 4 weeks ago as I didnt know that the HIP would disappear if we had a new government. I dont believe all Estate agents were against the HIP. My Estate Agent even had someone there that they recommended I should use to do the HIP. Saying " He is a lovely guy". They also told me I should go for the more comprehensive package of £340 instead of £299 (which I didnt ). I feel I spent that money on a very negative report that did not reflect facts. just estimates of what the assessor appeared to fish from the air. He didnt want me to go with him around the house to see what he was looking for. I was given no explanations of what the report would contain. He never asked for actual fuel or electricity bills. When I recieved the report it was completely incorrect as he quoted us as paying £1000 more /year than we currently are paying. We have only got energy efficient lightbulbs - He wrote we had 50% energy saving bulbs. He put our house 2 levels below my two neighbours who have identical houses even if our house has new loft insulation and new windows which they havent... When I complained about the report I never got a response. If this is the report that will be used to sell our house it has only had a very negative impact on prospective buyers as the agent hasnt sent a single viewer around yet. ( I heard people had asked for the details but decided not to view as they claimed the house would be too expensive to run) How do I get the Energy report amended? I paid money I couldnt really afford for a complete useless, false report.  I wont be able to get rid of the useless Estate agent until july.. Is it breach of contract if the agent doesnt actively tries to sell your house. Can I get out of the contract . I told them I wasnt going to put the house on the market until May but they told me they had a buyer and I had to get the HIP done as soon as possible before he fees of the HIP went up ( This was in April). I think they knew that a new government would want to abolish the HIP and they were just trying to get the HIP assessor money in his account if that was the case. I dont feel I can trust them at all.

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