Home Information Packs

Although the details aren’t clear, it’s definite that HIPs are no longer a requirement to sell a house. What I look forward to is some new system for selling houses. The old system of the 80s & 90s was expensive and not very secure for buyers, further it proved itself incapable of dealing with the housing booms (in particular that of the late 80s). What new system will we look forward to in the new millenium? Something that will make buying and selling a house as cheap and easy as buying and selling a car?

The Problems with House Selling

I am reminded of a discussion I had with a Solicitor friend in 1986. At the time it seemed that the problems and expenses of house sales might be solved by licensed conveyancers. This was of great concern to lawyers as the bread and butter profits for family solicitors were and are to be made from conveyancing of property (generally a job which can be delegated to clerical staff, but billed at good rates). I suggested to my friend that if (as seemed likely at the time) Estate Agents took over the conveyancing market, that it could well become the end of the family solicitor. His reply 25 years ago was that it was far more likely that Solicitors would take over selling Houses than Estate Agents would take over processing the sale.

Over the ensuing 25 years we have seen the computerisation of Land Registry, the growth of the Internet & WWW, and most recently an attempt to streamline the actual selling process which was generally acknowledged as being very unsatisfactory. Additionally the traditional Estate Agent is challenged by Internet Portals and Websites which threaten to replace their role in the selling process.

In unrelated developments Solicitors have become ever more specialised – I used to have a specialist solicitor who had a dual practice suing solicitors for malpractice, and suing/defending builders in disputes. One day he contacted me to let me know that he was dropping the building dispute side of his practice “My work in suing solicitors for malpractice has led me to the conclusion that people who work in more than one area don’t have enough expertise, and end up in trouble. Consequently I’m concentrating on one area only!”.

HIPs had a difficult gestation in which many of their objectives were watered down, or postponed in the face of opposition by vested interests led by the RICS. One of the most controversial pieces of legislation to influence the housing market Home Information Packs (HIPs) intended to eliminate many of the costs, and much of the heartache involved in a sale by providing residential property buyers with all the information they needed about a home without needing to employ solicitors to carry out any searches, it would speed up the process and prevent many deals failing at a late stage. Each pack would include a Home Condition Report (HCR), Energy Performance Certificate (EPC) and title deeds as well as planning searches. It would be the responsibility of the vendor to supply this information. The story of HIPs progression, and the compromises that were made to get the idea past it’s opposition was told in 2007 here.

I notice on Twitter that the general euphoria amongst Estate Agents at the news of HIPs demise, but to my ears this sounds like the cackle of  turkeys voting for Christmas. Whilst  the role of two Solicitors administering the contract seems cemented by a return to the old system, it looks to me as if Estate Agents are allowing a role in the buying/selling process to slip through their fingers, as without the need for a HIP a seller’s first point of contact in selling a house will be a website.

The Future of House Selling

But for the future – well the old system bears up fairly well under the conditions of a housing slump, so we will be safe for some time, but once the next housing bubble comes along all the same problems will come to the fore of public conciousness and a government will feel obliged to fix the problem. It must be certain that nothing like HIPs will be considered, with countless small businesses about to close, and an estimated 3000 people to lose their jobs, it’s unlikely that there would be an entrepreneurial will to repeat the mistake of setting up a business so reliant on the whim of government. Maybe a future house selling system could mimic the French system where public Notaires administer the house selling process on behalf of both parties – one lawyer, half the price, twice the speed.

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