CEO Corner

THE topic of discussion in the UK property industry is HIPs - Home Information Packs. 

So what is a HIP?  From the 1st July 2007, a vendor or their agent will need to have a home information pack produced for their property before the property can be put on the market for sale.  The HIP contains legal searches, title deeds, the terms of sale and an home condition report (HCR as it is known).

So why have HIP's been legislated and are being introduced from the 1st July next year?  The benefits being proffered include the prevention of transactions collapsing, cutting of the time between offer and completion, and to provide better information.

However, while many are touting the value of a HIP, a number of questions have been raised as to whether the introduction of HIP's will truly be beneficial for the industry and whether they will even be launched at all.

In his article in The Sunday Times on the 2nd of April, Phil Spencer raised a number of issues and concludes that "forcing sellers to produce a HIP is actually detrimental.  It will bury the property market in an avalanche of paperwork and will ultimately fail to improve the home-buying process." 

The issues he raises include:

• The extra costs may out weigh the benefits
• The Council of Mortgage Lenders will not accept a sellers reports so an separate valuation will still have to be obtained
• Insurers are yet to offer cover for purchasers who rely on a home condition report
• There are not enough trained home inspectors
• The Tories have indicated that they would abandon HIPs if they win the next election
• It may take up to a fortnight for a HIP to be prepared
• There are concern about security give the volume of information contained in a HIP and being handed over to complete strangers
• The shelf life of a HIP will be limited as searches and surveys are date sensitive
• How will sales of properties without a HIP be truly policed?

Check out his article at http://www.timesonline.co.uk/article/0,,2098-2109937,00.html