Gardner Leader

Stuart Durrant, Conveyancing Partner at Gardner Leader Solicitors, reports on the changes recently announced to Home Information Packs (HIPs).

I’m not a huge fan of Home Information Packs. Many estate agents tell me that the Pack is rarely, if ever, requested by a buyer and is seen as a costly bureaucratic obstacle by the seller.

I have genuinely never met a client who has asked about the energy efficiency of a property prior to purchase. Quite rightly people are interested and concerned about this aspect of their new home, but I very much doubt if it is one of the primary factors that affects their decision whether to purchase – generally people understand that an old, quaint and listed cottage is going to be more expensive to heat than a new property built in accordance with modern building practices.

The latest figures on HIPs show that more than a million homes now have energy ratings as a result of HIPs, helping home owners potentially to save money on their fuel bills and cut carbon emissions. This is not a bad thing; however my objection has always been that the requirement has been grafted onto HIPs as an afterthought. Surely the better place for this would be in the purchaser’s survey? It has always been possible to ask the surveyor to do an energy efficiency report while at the property; unsurprisingly this is rarely ever requested.

And yet the government doggedly continues to pursue and tinker with the scheme. It is now Margaret Beckett’s turn to introduce ‘a new package of measures to ensure consumers receive improved information in the home buying and selling process… [so that they] receive more helpful information about their future home.’

The ‘improvements’ announced include:

• Making HIPs available sooner - Sellers can currently commission and pay for a HIP and then start marketing their property for up to 28 days before the pack is available, meaning some buyers may lose out by making decisions about purchases without benefit of seeing the pack. From 6^th April, you will have to have a HIP before marketing the property. In short your estate agent won’t be able to put the property in their window, or on the internet, until you have a HIP physically in your possession.
• Expanding HIP content - A new Property Information Questionnaire (PIQ) in the pack will provide a summary of information about a property in one place, helping buyers make decisions about whether to view a property, and ultimately whether to make an offer. Details in PIQ will include flood risk information, gas and electricity safety, service charges, structural damage, and parking arrangements, to help buyers make decisions on whether to view and purchase a property. The new PIQ will go alongside other important information in the pack, such as energy performance certificates.

To quote Margaret Beckett: “Home Information Packs are potentially a vital aid to consumers who are seeking to purchase a home, and I am firmly committed to ensuring they work as well as possible. That is why the changes made today will make sure consumers are better protected, better informed and better assisted when buying a home.”

From a conveyancing point of view, it is useful to have a local authority and a water search a little earlier in the transaction. Frequently however, these searches in HIPS are either out of date, or of suspect quality. In either case new searches will have to be made, thus duplicating the cost.

Currently information on the exact contents of the PIQ is unavailable, but it appears that it will duplicate most of the information already collected in the property information forms, used as part of the current conveyancing process. With the exception of the Energy Certificate, everything else is already covered.

According to Government research, HIPs are not impacting on house prices or hindering transactions. While this may be true, I would argue they are not assisting either. They merely add to the cost and, from the 6^th April, increase the length of time it will take a homeowner to sell from the time they decide to put their property on the market.