Are You For Or Against HIPs?
Home Information Packs are designed to speed up the house-buying process. But some people still aren't happy.
The introduction of Home Information Packs (HIPs) moved a step closer last week with the Government publishing its timetable for how and when they're to be implemented.HIPs will provide buyers with essential information on a property as part of plans to cut the time it takes to buy and sell a property and reduce the number of sales that fall through.As with anything new though, not everyone is in favour of HIPs. A recent poll on this site revealed that almost 60% of Fools aren't keen on the idea. It's still not clear what the costs will be -- sellers will be responsible for providing them and figures ranging from £500-£1,200 have been bandied around.And, apart from HIPs containing deeds and Land Registry and local authority searches, it will also include a survey of the property known as a Home Condition Report. It's this latter requirement that has caused the biggest outcry.Not only are buyers likely to be suspicious of a report paid for by the seller, the Council of Mortgage Lenders has been rather vague about whether they will be happy to offer mortgages without a valuation survey. The reports won't include an assessment of how much a property is worth so there's concern that buyers will find they've still got to pay for a valuation before getting mortgage approval.Lenders have merely confirmed that they're prepared to use automated valuation systems to establish value "in some cases, but not all". Anti-HIP campaigners claim that in the USA where automated valuations have been in place for more than a decade, over 40% of properties are still physically inspected for valuation purposes.It's estimated that 28% of transactions fall through after an offer has been accepted causing wasted expenditure of around £1 million a day and the Government claims the HIP will reduce the risks of failed transactions. They're introducing a trial scheme later in the year to iron out any problems and whether you're against them or not, HIPs will be compulsory for everyone from 1st June 2007.More: Get a better mortgage.