If Home Information Packs (HIPs) had not been scrapped we would not be in the confusing position we are now with the introduction of the new Material Information Guidance (MIG). The HIP, over the last decade or so, would have evolved into a pack that could easily have contained all of the new required Material Information (MI). ). Are we now being offered another bite of the cherry, and should we all be grasping this bull by the horns?
If I remember rightly, the basic HIP contained; Office Copies and a File Plan, a pretty useless Property Information Questionnaire and a Local and a Water and Drainage Search. Admittedly nothing of much use to a potential buyer or even a buyer’s conveyancer. However, some HIP providing companies (including mine) were, by working closely with the seller’s conveyancer, adding additional documents whilst the property was still being marketed. For example, copies of documents containing, Restrictions, Easements, Rights, and Covenants. In addition we were adding Guarantees, Planning Permissions, and Building Regulation Approvals. In fact anything and everything that would help the transaction proceed quickly and easily. Most of our HIPs, as a result, became as exchange ready as was possible. It therefore would not have been beyond the wit of man (or woman) to have easily and quickly added the other information now required by the MIG.
Due to a healthy amount of competition between HIP suppliers and others, the price of a HIP was not at an amount high enough to have deterred most property sellers from marketing their property. And, there was a very good deferred cost offering available that was being used by many (wouldn’t that be helpful now?). HIP production was also very rapid, so there was hardly any delay from taking a property on, to being able to market it. Although HIP production was fast back then, given the massive advancement of technology over the years, they would be being produced almost instantaneously now.
We now have a situation where MI is required, but is not yet being supplied by many agents, probably because, although there are penalties, Trading Standards is not yet willing, or able, or both to implement/enforce them. HIPs however were brought in by statute and it would have been a serious offence for a property to have been marketed without one. There was virtually 100% HIP compliance.
Compliance with the MIG will happen, because those requirements are not going to go away, but it will take time and will for some, be painful. All this confusion and uncertainty now would have been unnecessary, if only those in power had had the gumption to suspend HIPs for a while and work out what additional information and documentation was required in order to make them beneficial for all parties.
I distinctly remember a meeting of the Association of HIP providers and Grant Shapps, where the former made it clear that its members would do all in their power to refine the poor product that The Housing Act 2004 stipulated was required. Shapps was having none if it however, HIPs were going whether we liked it or not. He is now in charge of the defence of our country and in these troubled times, I hope he does a better job.
It is very unlikely that HIPs will return, but we don’t want to make the same mistakes again and be in this situation in another decade’s time. Whatever MI evolves into, it must benefit all parties, seller, buyer, agent, conveyancer and surveyor. In my opinion, the only way that will happen is if all of those parties work together over the coming weeks and months.
Rob Hailstone is CEO Of Bold Legal Group
2 Responses
Sadly, people want something for nothing. Too many agents charge nothing for listing a property and do not get a fee when a property withdraws from market. There are also too many Conveyancing firms out there charging no sale no fee. For me, a serious sellers needs to do what they can to make the property sell. That does mean paying out for services at the outset and gathering information. I am seeing a lot of issues with purchases and title’s where it is patently obvious sellers has not checked anything through before contracts are issued. If matters are checked early on, it will save so many times and delays. So yes I would be in favour of HIP’s or MIG’s and they should not have gone away in the first place. But they must be clear, concise and contain good information. HIP’s were a good template but they did not go far enough. Sellers need to understand that they need to pay upfront to be deemed serious sellers and if they are not happy to pay, they are not serious. The British attitude to selling houses needs to change.
I agree too many people want something for nothing – check out those who purchase funeral plans because of cash back – or loyalty cards where prices are inflated only to give a loyalty car discount to get prices to compete with their competition – you need to be an actuary to really calculate the Value of the services provided. Sadly due to the vast increase in Propaganda – the laziness of the purchaser and in some cases a willingnees to be in breach of Law or HMRC rules the deterrant of a fee and interest (is simply just an added tax) rather than dealing with the matter as deceit and sometimes Fraud. The solution is to provide full details of our services up front – remove clients who do not subscribe to our processes (often preferring their own) of comprehensive due diligence. We are removing consumers who are unwilling to work with us to engage and collaborate. Look at the end result – know what you want to achieve and when. Repairs and corrections for ommissions – can be exceedingly costly.