HIPs cause house sale slump

Dec 18 2007 by Vicky Anderson, Liverpool Daily Post

MORE than two-thirds of homeowners across Merseyside say they’ve been put off selling their homes because of the need for Home Information Packs, figures released yesterday show.

As of today, HIPs have been rolled out to become a mandatory requirement for the sale of all properties in the UK.

However a survey has revealed that uncertainty caused by their introduction could lead to a significant drop in the number of homes in the area going on the market in the coming months, with 67% of homeowners saying they would avoid selling due to the scheme.

The study, carried out by Wirral-based surveyors Brewster Associates, also exposed the public’s lack of faith in HIPs as a way to improve the conveyancing process, according to the company.

Almost 80% or respondents said that they do not agree that the scheme will create a more transparent and efficient system.

Brewster Associates’ senior partner David Brewster said: “It is clear from this survey that the public’s perception of home information packs is far from positive.

“Many obviously see it as an added hassle, one that might actually dissuade them from putting their home up for sale altogether.”

Homeowners were also asked whether the various delays and amendments to HIP legislation have caused a lack of confidence, with 94% believing that they had.

Mr Brewster added: “There is very strong evidence that had the Government stuck to its guns rather than continuously bowed to pressure by delaying and amending the scheme, HIPs would not be perceived as negatively as they are now.

“The original HIP proposals included a mandatory home condition report, but as soon as this became an optional component, many quickly wrote off the legislation as useless.

“The key component of a HIP is now the Energy Performance Certificate, which due to European legislation would be required anyway, so it seems that HIPs are indeed perceived as inevitable in the long run.

“The best policy for buyers, sellers and those associated with the property profession is therefore to grin and bear these first few months of full HIP implementation with the hope that any initial issues will be ironed out in time.”

But despite criticism and the suggested mishandling of the introduction, more than 55% of those questioned said that they did not believe that HIPs will be scrapped. Those in favour of HIPS argue that the scheme is being used as a “scapegoat” by bodies who are against the packs – which contain copies of title deeds, any recent planning permission or building consent given on the property, a local area search and an energy performance certificate.

They were introduced earlier in the year for houses with four bedrooms or more but are today rolled out to include all properties being put up for sale.

It is an issue that has divided experts throughout the housing market.

Patrick Crean, managing director of search company PSG Liverpool, agreed that the current depression in the housing market meant now is not an ideal time to roll out HIPs, but argued: “The Government's introduction of HIPs could have been handled better and it is not the ideal time to introduce the final roll-out of a major change to the house buying and selling process in an already depressed market.

“However, any further delay would have only caused more confusion for consumers.

“HIPs are all about providing information upfront and highlighting any possible problem areas.

“The information will now be available at the start of the conveyancing process, rather than towards the end, when problems may cause deals to fall through, after costing all parties a lot of time and money. Consumers do not need to understand all the reports within the HIP, but provided it is forwarded onto their solicitor, the solicitor will be able to quickly advise on any problem areas.

“It is clear that the depressed housing market is due to the wider influences of the sub prime market crash and recent interest hikes.”

vickyanderson