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27th Feb 2008
HIPS – LOVE THEM OR HATE THEM?
Whether you love, hate or are indifferent to them, a Home Information Pack (HIP) has been required for the sale of all residential properties marketed from 14th December 2007. This will no doubt give some comfort to the several thousand people who have spent thousand of pounds training as Domestic Energy Assessors and to the numerous companies that have heavily invested into providing the apparently complete HIP package but, for many solicitors and estate agents, there remain many lingering doubts as to whether HIPs in reality add any benefit to the property market and the public at large continue to be bemused by the whole process.
I think that most of us will agree that the Government has a lot to answer for. Despite the assurances of Government of a mass media campaign to alert the public to the need for a HIP, most sellers knew little or nothing about a HIP when the first HIPs were required from 1st August 2007 for properties with four or more bedrooms. Public awareness has not got a great deal better, with the results that estate agents as the usual first port of call for a seller, had the unenviable task of attempting to explain what a HIP was, the procedure and the cost of it.
The historical uncertainties of HIPs only added to the problems. The first seeds were sown in 1997 when the Government thought up “sellers packs”. It actually took until 2003 for the birth of the HIP, as we now know it. The debate and uncertainty then started, until 6th November 2006 when a HIP dry run commenced that applied to only six cities. There then followed what many consider to be a rushed and ill-thought out start date of 1st August 2007 for properties marketed with four or more bedrooms. With much wide spread concern, from 10th September 2007 a HIP was required for three bedroom properties and only three months later required for all properties. Even now, due to inadequate infrastructure and accessibility to various documents that are required for a HIP, it is not until 1st May 2008 that a complete HIP will be required when first marketing. Even then, the key requirement and probably most useful element from the buyers point of view of the originally conceived HIP, being a Home Condition Report, does not have to be provided and it is doubtfully that it will become mandatory.
The cynics amongst us, of which there are many, are of the opinion that the rush to implement HIPs was for nothing than a means for the Government complies with a European Union Directive for properties to have an Energy Performance Certificate (EPC). The reasoning behind the EPC is to address global warming issues by increasing energy efficiency in the home and this is laudable, but it did not have to come with the many other documents that make up a HIP. A recent study has revealed that only 10% of purchasers of three bedroom or more properties read the HIP before making an offer, showing a distinct lack of interest and or knowledge by the public.
Despite all of this, all sellers now need to understand what a HIP is and all professionals involved in the residential market have no option but to embrace the whole HIP concept to ensure they provide the best possible service to their clients and remain competitive in a currently uncertain market.
From a personal point of view, despite my own misgivings about HIPs providing any true benefit to the selling of residential property, I and trust other solicitors will agree that we need to work in partnership with our other professional colleagues to make the system work as flawlessly as possible for the benefit of our seller clients who are, undoubtedly, the piece of the HIPs jigsaw that is least prepared for what has been imposed upon us. |
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