Why HIPs Aren't So Hip After All

Home Information Packs are looking more and more like a waste of time and money.

Three years ago when the government first came up with the idea of the Home Information Pack for those buying and selling property, I was rather keen on it. To my mind, anything that would speed up the conveyancing process and reduce the number of transactions falling through could only be good.

Unfortunately, every time the government has released more details about how the scheme will work, I get more doubtful about whether HIPs will be worth the paper they're written on.

The last straw came a few days ago when the Department for Communities and Local Government (as the old 'Office of the Deputy Prime Minister' used to be called), published the small print - all 54 pages of it.

For a start, the controversial Home Condition Report, which is designed to let buyers know the state of the property before they put in an offer, will not include a valuation. Buyers are therefore, still likely to have to pay for their prospective lender to carry out a valuation, particularly if they want to borrow more than 80% of the purported value of the property. Lenders are also likely to want to check out the value of unusual properties or those being bought by people with a poor credit record.

If a property fails to sell after six months, or if it is taken off the market for 28 days or more, a new Information Pack will have to be drawn up at the expense of the seller. And, since indications are that a HIP for an ordinary semi-detached house will cost, including VAT, around £800 and £1,000 or more for a detached property, that's quite a high price to pay, not least because other important information won't always be included in the HIP anyway.

For example, it won't be compulsory for the seller to include information about rights of access, any financial liability to maintain land or contribute to maintenance outside the property, any potential subsidence problems or actual or potential environmental hazards - including any risks of flooding, radon gas or contaminated land.

Note that there's no way out for sellers to avoid having to produce a HIP, even if it's a private sale between friends. If a property is to be sold and the seller doesn't organise a HIP, they'll be fined £200 for each occasion they market a property without a HIP.

While it's admirable to want to speed up the home-buying process and cut the number of failed transactions, I don't see the point of forcing sellers to produce incomplete Home Information Packs at vast expense when there's no guarantee that they'll include the sort of information buyers actually want to know about!