It is fair to say that ‘Home Information Packs (HIPs) 1.0’ wasn’t exactly embraced by the industry and eventually brought the “quasi-lawyers” (estate agents) out onto the streets with their pitchforks!
The reticence then was HIPs would slow the market down, add extra cost to selling and alienate casual sellers. From my memory of selling houses, the total lack of certainty was always in the forefront of my mind and decades later it has got worse.
Many lawyers and agents of today probably don’t even remember HIPs. Basically, the Government of the day spoke to about five ‘industry experts’ and produced a new set of regulations that heralded a whole new industry. Dozens of firms sprung up with a bewildering way of putting a Home Information Pack together before a house could go on the market. At the same time thousands of random individuals decided they wanted to be Home Inspectors and paid a small fortune to commence their (wholly inadequate) training. HIPs essentially meant that sellers would have to provide an entire ‘logbook’ of data up front BEFORE marketing their home, I know, nuts, right?
Well, no actually. Here we are, many years after it was all cancelled, and we live with a 34% transactional failure rate and a system where sellers can ‘test the market’ and change their minds whenever they feel like it, wasting estate agents marketing time and money and a buyers survey fees and abortive costs. The seller walks away without spending very much at all.
Buyers must commit thousands to purchase a property that might be:
- Built on contaminated land
- Prone to flooding
- Built opposite a proposed wind farm
- Have a tree in the garden that has a TPO
- Be unregistered
- 1,000 other items to go on this list to inflict pain, costs, and suffering on buyers!
Information is the key to shining light on the process that is wasteful, stressful, and outdated.
I am seeing many conveyancers all up in arms about the changes saying that they are concerned that Estate Agents will be treading on their toes and trying to handle the legal stuff. All I can say is that this is utter nonsense.
If, by the legal stuff, people mean the information that a buyer should really be presented with so that they can make informed decisions, ahead of making an offer, then seriously, get a grip. Finding this information out is not treading on anyone’s toes. It is presenting all the facts for marketing purposes. No one is doing the conveyance for you.
Why is it that conveyancers on the one hand say that the amount of extra work that needs to be done that adds to delays in the conveyancing process is getting ludicrous. Yet when a positive change like this comes about that, if done correctly, will generate sales being agreed with ALL of the required information to enable a quicker transactions, a number of conveyancers get their knickers in a twist about how their job is being done for them….which it is not!!
Conveyancers still have a conveyance to complete, but with all of the factual and material information to hand, along with a buyer who has already been presented with all the facts. Seriously, what’s not to like about that?
At some point progress must happen in the sector. The whole ‘Them and Us’ attitude between Estate Agents and Conveyancers has got to disappear. The home mover must be put at the heart of what is happening and enable people to save time and money by doing things properly.
So, Estate Agents will be saying that there will be a delay in property coming to the market as a result. Initially that may be the case, but seriously, just how much of a delay does this represent? Surely the reduced fall through rate and more positive cashflow must be worth the small initial delay in proceedings.
So, what if a Search Pack was ordered ahead of marketing by the seller?
Most, if not all reports are now written with the consumer in mind. Certainly, the reports that we deliver are all relatively easy to understand and come will a helpline to answer any questions. The vast majority of Part C will be answered in a local search and a decent environmental report. IF a sale is agreed quickly and there is time, those same reports can be used by the buyer too.
Can I remind anyone with a screaming inner voice that hates this concept exactly what the Search Code means?
The Search Code:
- provides protection for homebuyers, sellers, estate agents, conveyancers and mortgage lenders who rely on the information included in property search reports undertaken by subscribers on residential and commercial property within the United Kingdom
- sets out minimum standards which organisations compiling and selling search reports have to meet
- promotes the best practice and quality standards within the industry for the benefit of consumers and property professionals
- enables consumers and property professionals to have confidence in organisations which subscribe to the code, their products and services
A conveyancer does not have to have ordered the searches and reports themselves and is making it up if they truly believe that to be the case. How do you think anything gets bought at auction?!? (“Oh, yeah, I conveniently forgot that when I told the buyer that I couldn’t accept searches from them if they bought them themselves“)
As long at the reports meet with the Search Code and are from a CoPSO regulated supplier, it matters not who ordered the reports. What matters is that the information is shared at the correct time and not hidden in the back end of the conveyancing process and reported to a buyer at the point at which all they want to do is pick up the keys as they are so financially committed. Which is too late and simply shameful practice.
Property Searches Direct have been lobbying for these changes for over 3 years now and are delighted with the direction of travel.
I can hear many screaming already “Oh, but you have a vested interest in this”. Easy thing to scream when you are a conveyancer or estate agent with a resistance to change. But yes we do. We have an interest in progress and better services for home movers than many are currently presented with. We believe that there is a better way and that the current processes that many are clinging on to are outdated and not in the best interests of a home mover.
All change please. Happy days!
Daniel Hamilton-Charlton is CEO & Founder at Property Searches Direct
10 Responses
David says and I quote:
“I am seeing many conveyancers all up in arms about the changes saying that they are concerned that Estate Agents will be treading on their toes and trying to handle the legal stuff. All I can say is that this is utter nonsense.”
Have you read the 30 pages plus guidance notes issued by the National Tradings Office?
It is never prudent to make wild statements before checking the facts.
Part C requirements seemed to have been designed to increase the exposure of estate agents to claims for negligence. If an agent acts for a seller and misrepresents the facts or the law via Material Information then that agent is in the frame
Data dressed up as ‘fundamental’ for a buyer is frankly useless without context.
Have a nice day.
Thanks for your comment ‘Stuart’ 🤣
“If an agent acts for a seller and misrepresents the facts…” they should be hung out to dry. Not sure what you point is.
I have read the 30+ pages and my points still stand.
This is about delivering better information up front, better discloser of things that could otherwise derail a sale and save wasted time and money. You wish to fight that do you?
“we live with a 34% transactional failure rate”
Source? The Home buying and selling group just last month quoted figures of 25%; albeit again unsubstantiated.
“Buyers must commit thousands to purchase a property”
I’d wager it below that but if your estimate holds then are you suggesting that sellers would have to commit the same sum just to “test the market”?
“Oh, but you have a vested interest in this”.
Quite and I am sure the gains of having searches paid earlier in the transaction will be beneficial to you and a number of other providers; particularly if those searches then need to be repeated by the buyer as have expired.
Great to remain anonymous, well done.
So would 25% be an acceptable figure, what about 15%? Every transaction failure is painful and expensive for someone and invariably unfairly so. Let’s not belittle the cost of a failed transaction no matter what the figure.
I don’t believe that people should “Test the market” for close to no cost. You either want or need to move, or you don’t. Just because more an more people see a home as a commodity and money making scheme, does not give them the right to ‘try’ and see if they can get what they want financially out of it and for that to be the determining factor. It’s come about by too many listers at Estate Agents historically over valuing and saying, go on, let’s give it a try, because they want to win the instruction and get a board up. Again, it’s shoddy practice and this should help to reduce those listings.
I’d like the farce of a search only being valid for three months at the point of exchange to be reviewed. I’d be very interested for someone to actually review how many times there is a difference in the report of the subject property over that time period, other than the date. We are not a big enough supplier to see a massive benefit, but thanks for assuming otherwise 😄🎉
“Why is it that conveyancers on the one hand say that the amount of extra work that needs to be done that adds to delays in the conveyancing process is getting ludicrous. Yet when a positive change like this comes about that, if done correctly, will”
Quite simple, really. Because it will not, in fact, be done correctly. As with HIPs, it will be an expensive failure and the only people that benefit will be the vested interests such as the author of this article.
34% failure rate is nonsense, as virtually any conveyancer can attest.
But it ‘can’ be done correctly and that should be the aim. Why set out an argument saying that it will fail because it won’t be done correctly?? I did caveat my statement with “if done correctly” did I not?
HIPs needed to be developed and improved, not scrapped. We would be 15 years in the future and in a far better place if they had evolved and the value that they ‘could’ have delivered, realised.
Would 20% be an acceptable failure rate for you then?
What’s wrong with a property being unregistered?
Nick, nothing. But is can significantly delay proceedings if that is only found out after a sale has been agreed.
This nearly derailed a transaction for my mates son earlier this year.
Then your mate’s son should have instructed a competent lawyer.
super article, I agree with it purely from a data and process perspective. What you don’t stress is that a lot of information you are talking about is increasingly accessible and in some cases freely available – I think a change in the system is inevitable, and disruption will come.
One question: What is the international comparison? Is this just an English problem?