Home Information Packs - Fit for Purpose?

New provisions added to Home Information Packs (HIPs) may be too little too late.

Home Information Packs (HIPs for short) have been part of the residential conveyancing market for just over two years, but some industry experts have already written them off as an expensive failure. The introduction of HIPs was widely considered to have been badly managed from the start. One of the most high-profile examples of mismanagement was the last-minute removal of the compulsory requirement for a home condition report. Many experts at the time complained that the report was the one document that could have made a real difference to the value of a HIP. To decide if the critics are right, it is worthwhile revisiting what the government’s main objectives were for the packs.

The pack should have ensured that consumers were better informed, the conveyancing process was speeded up and the amount of energy consumed in our homes was reduced. Unfortunately, the industry view is that the packs have failed on all three counts. Despite not actually admitting that HIPs are flawed in their original form, the government introduced reforms to three main areas in April this year in an attempt to get the packs back on track. The reforms covered marketing, contents of the packs and search practices.

Marketing reforms have meant that it is no longer possible to market a property while a pack is being prepared. In effect, if you do not have a pack you will not be able to advertise a property for sale.

Additional content has been added to the pack in the form of a property information questionnaire (PIQ). The PIQ has to be completed by the seller and covers flood risk information, service charges, structural damage, gas and electrical safety, and parking arrangements.

Changes to search practices appear to mainly affect private companies providing the personal local authority searches included in the packs. This change may ultimately see weaker search providers go out of business and increase the cost to the consumer of having a pack prepared.

The Office of Fair Trading launched an official study in February 2009 into the conveyancing market. This study should give a comprehensive answer to the question of whether consumers are receiving a good service. The findings are likely to be ready in the next 12 months, which will potentially coincide with the general election. The outcome of the election may also have a profound effect on HIPs. Depending on which party wins, it may be ‘all change’ again for the conveyancing sector. The Conservative Shadow Housing Minister Grant Schapps has already said that his party will partly scrap HIPs if they come into power.

With the depressed housing market, conveyancers have had much more to worry about than HIPs over the last two years. There is a general feeling that the packs are just another administrative ‘hoop’ to be jumped through, so it seems unlikely that many in the market will mourn if the next government reduces or even removes HIPs from the conveyancing process.