So, it’s happened at last. The demise of the home information pack (hip) and the return to agents being able to list properties as soon as they are instructed, subject to a few small and non time delaying administration points.
As announced last week the new coalition government has implemented one of their mutual policy objectives and have announced the suspension of the hip with the intentions of scrapping them completely in due course. All that remains necessary for estate agents to act is to confirm their instructions in writing, complete anti money laundering identity checks and order an energy performance certificate.
There will be some delight in the estate agents office throughout the country at the removal of the regulation and of course pleasure with all sellers that have now saved themselves the £200 to £300 hip cost. However buyers might be a little less pleased as many of the costs associated with a conveyance will now revert back to them. These include local authority, water and sewage searches. What is gained on one hand is lost on the other! Particularly I think of first time buyers.
As an estate agent I am saddened at the demise of the hip for a number of reasons. Most importantly I believe hips have speeded up the transaction between ‘under offer’ and ‘exchange’ and further more have reduced the ‘fall through’ rate of properties in the lead up to exchange of contract. Delay and disappointment is stressful to our clients and of course bad for us.
I’m also sad to see the link between conveyancers and estate agents drift apart. Hips required us to start the team work on instruction. It cannot be helpful to revert to the old system of conveyancers learning of their client’s sale plans the morning the notification of sale arrives from the estate agents.
What will the removal of HIPS mean?
The most interesting observation going forward will be whether the removal of the hip will bring more property on to the market. As has been stated in this column over the last few years the market is desperately short of listings, resulting in inactivity as sellers have not put their properties on the market for fear of not finding a new home go to. Will the new political stability, summer weather, removal of hips mean a flood of properties coming to the market? Would such a flood of properties be good for the market and prices anyway? Time will tell but I think the loss of hips will not alleviate the economic concerns, lack of mortgages or issues of affordability which have frustrated the market for the last few years.
Finally I would suggest that if the new government is keen to remove bad laws then they would do well to address the issue of VAT on listed building repairs or the unworkable Hunting Act.