LONDON HOMES & PROPERTY
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or those who have stayed put for the last two years and haven’t yet encountered the pleasure, HIPs – also known as Hopeless Information Packs by many a bitter vendor were launched in 2007 as a set of documents designed to provide the buyer with key information on the property and to speed up the buying and selling of property. Initially designed for properties with four-plus bedrooms, then three, now every property must have a HIP before it can legally be marketed for sale. Inside are several documents, including an Energy Performance Certificate (the element most routinely disregarded by buyers), a Property Information Questionnaire (PIQ), local authority searches, evidence of title, leasehold information and (if a new-build home) sustainability information, to be compiled by the vendor, an estate agent, solicitor or HIP provider. The idea is to provide all the information a buyer needs at the start of the process, so that fewer sales fall through. So where does it go wrong? And are the HIP’s days already numbered? For many, the big problem is one of unnecessary cost. “HIPs have acted as a mechanism to generate money for the government and for agents and other providers to charge a hefty premium on the service,” says TV presenter Sarah Beeny of this half a billion pound-a-year industry. “I’ve seen HIP providers charge up to £800 when you can get one through Tepilo.com for £186.” One disgruntled vendor, 35-year-old commercial consultant John Weston, thinks his HIP was a pointless expense. “We paid £380, which seemed like a lot of money for searches that will be out of date before the end of the sale purchase and for information that the buyer would have paid for in the past,” says Weston, who has just sold up in Surrey to buy a family home in East Sussex. “Our buyer didn’t use the HIP anyway,” he adds. “They relied upon the information received through searches conducted by their solicitor and the full structural survey they carried out. The surveyor, our own solicitor and the buyer’s solicitors all asked questions that we had already answered in the HIP. And, as buyers, we were amazed how estate agents didn’t actively share the HIPs for properties we viewed. In short, a total waste of time and money.” It certainly seems pointless when much of the information is available to buyers online or through the Land Registry. “And I would still probably get my own buyer’s survey done. In many cases, you’d need to for your mortgage provider anyway,” says Sarah Beeny. The information contained within a HIP isn’t always to be relied on either. “I bought a flat in December 2008 and as an exercise requested a copy of the HIP,” says Penelope Court from Beauchamp Estates. “My solicitor couldn’t use it as it was inaccurate even to the point of lacking the correct lease. And it failed totally to uncover
the fact that works had been carried out without the landlord’s consent, which meant I had to enter into a conditional contract.” Don’t expect energy assessors to be quite up to speed with aesthetics either, says Douglas Kent from the Society for the Protection of Ancient Buildings, who says HIPs may actually be harming our old homes. He recently bought a Grade I listed, 15th century house in Essex and, after an unflattering EPC, was told by the assessor that he could improve the property’s energy rating by adding some new external cladding – despite the property’s elaborate external plasterwork being one of the reasons it is Grade 1 listed. “He even said it would improve the appearance of the building,” says Kent. “In another case where a house had a thatched roof, the energy assessor ignored the thatch as insulation because he said it wasn’t on his software – even though thatch can be one of the best insulators.” So what is the alternative? “An in-depth conveyancing pack which was really ready to go and held some weight with solicitors and mortgage lenders,” suggests buying agent Tracey Kellett from BDI Home Finders, echoing the Tories’ plans. Or something like the Scottish Home Report, says Barbara Pentecost from Smiths Gore chartered surveyors in Berwick-Upon-Tweed. “I see both the Scottish Home Report and the HIP in action and I have to say, NO ONE looks at the HIP,” she says. “At least the Home Report has a single survey element, which gives the buyer a reason to be interested and can be used as a mortgage valuation. Some buyers still get surveys, but not until their offer has been accepted in principle.” Or we could just return to how we used to do it before. It sort of worked after all, with the buyer and vendor each represented by a solicitor who is legally responsible for the advice they give. Amid all the dissent, there is one lone voice in favour of the HIP. “If we scrap HIPs, we are still likely to need the Energy Performance Certificate, so sellers’ costs won’t really be reduced. They will just have less information to give buyers,” says Kate Faulkner, director of the independent advisory Designs on Property, whose First-Time Buyers Pack highlights the benefits of a HIP, particularly for those just entering the property market. “A HIP can help you to budget more precisely, for example gas, water and electricity bills, ground rent or service charges. You can see what might affect your decision to buy the property, such as it’s too expensive to heat or is prone to flooding, and what might affect how long it takes to buy, if the Title isn’t fully registered, for example, or there is missing planning consent,” says Faulkner. “HIPs are being used as a political football,” she adds. “While they are a legal requirement, we should be arguing how to make them effective for the industry and consumers, rather than whether to have them or not.” property news 13