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Home information packs (HIPs) – will they just push up the cost?
Nov 8, 2005
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The government is still aiming to make Home Information Packs (HIPs) compulsory from early 2007. But Bridget Redmond, a property lawyer at Willans, is not convinced that HIPs will live up to their promise and reckons they will push up the cost of selling a home.
Bridget said: Once HIPs are made compulsory, anyone selling a residential property (eg an estate agent) will be legally bound to make a HIP available to potential buyers.”
HIPs will apply to buy-to-let as well as owner-occupied properties. The exceptions are properties being sold without vacant possession (ie with a sitting tenant), and those in multiple occupation such as buildings divided into bedsits with communal facilities.
Bridget Redmond believes the principle of HIPs is good in theory. She said: “The idea is to provide information about a property as early as possible in a transaction. But much of the delay in our present system happens because we have chains and HIPs won’t improve or change that.
“The information that will have to go into a HIP is pretty much the same as the information we already collect in the course of selling a property. The big difference is likely to be the addition of the ‘home condition report’, which will have to be prepared by a qualified ‘home inspector’. But there are some big questions over practical aspects of the scheme. For example, will there be enough qualified home inspectors by 2007 and will they be able to get professional indemnity insurance? These questions need to be answered before the scheme can become compulsory.
”The original aim of HIPs was to improve the house selling system but many of us are concerned it will simply push up the cost. A whole industry of HIP providers has sprung up and is poised ready to make money out of unwary homebuyers when the scheme come into force. These businesses have made a huge investment and are clearly expecting to make big profits out of HIPs. Are people going to see it as such an ‘improvement’ if the average cost of selling a home goes up?”
Partner Bridget Redmond has specialised in residential property since qualifying in 1996. She joined Willans from a large regional practice where latterly she acted for individuals involved in company relocations. Contact bridget.redmond@willans.co.uk