The Government’s recent announcement that it is increasing Home Information Pack (HIPs) regulation has attracted criticism from members of the property industry who say it will increase the costs on people trying to sell their home at a time when the housing market needs a boost.
Others believe HIPs still don’t go far enough when it comes to environmental matters such as flood risks.
Opponents to the changes say they will now include:
Town halls being instructed to “identify specific cases of non-compliance and enforce the requirements” – and start fining home owners £200 a time who do not follow the rules.
Making it more difficult to advertise your home: From April 2009, the Government is cancelling the “first day marketing” provisions. These allow sellers to place their home on the market if a HIP has been ordered, but has not yet been completed. The cancellation will be mean that sellers will have to wait longer before they can put their home on the market. They will be fined if they advertise their property without a HIP. Transitional provisions on insurance protection, introduced because of search delays, are also removed – hence increasing the time to produce a Pack.
Resurrection of Home Condition Reports: Home Condition Reports (slimmed down surveys commissioned by the seller) are currently voluntary. The Government is to “explore options” to force sellers to provide information “about the condition of homes”.
However, buyers and their lenders are simply not going to trust these third-rate surveys.
Gold-plating the Packs: The time to complete a pack will increase, as sellers must personally fill out a detailed new ‘Property Information Questionnaire’ as part of the Home Information Pack. Yet this will be of little interest to buyers, who will instinctively treat information provided by the seller with a touch of scepticism.
Conservative MP Grant Shapps, the Shadow Minister for Housing, said: “Home Information Packs have already harmed the market and discouraged sellers. Given its fragile state, the last thing the property market needs is the prospect of heavy-handed fines.
“Ministers are simply in denial. They are moving ahead with yet more regulation, not to help home buyers, but merely to justify their utterly discredited Government intervention.
“The housing market is on its knees and Labour’s response is to make it more difficult and more expensive to sell your home. Conservatives will scrap Home Information Packs. If anything, Ministers should be using their emergency powers to suspend HIPs and provide a shot in the arm to the ailing market.”
James Sherwood-Rogers, managing director of Landmark Legal and Financial comments: “We are pleased to see that the Government has recognised that Home Information Packs lack certain environmental information and has made moves to put together a more comprehensive pack for buyers.
“However, while the addition of the PIQ may prove useful in some cases, the homebuyer should not be completely reliant on the information provided by the seller particularly when it addresses serious issues such as flood risk.
“Just because a property may not have been flooded in the few years that the seller has lived there, does not mean that a property is free from flood risk. The PIQ may prove misleading for a homebuyer as the source of the information is partly based on opinion and is not necessarily comprehensive.
“Many homebuyers may mistakenly believe that their property is free from flood risk. The only way that a buyer can determine whether a property is situated in an area that is likely to flood is to undertake a conveyancing-ready flood report. Merely accepting the information provided by the seller would not only be irresponsible but could potentially be a very costly move for any buyer.”
