By David Pett, director of HIP provider Hip2go based in Norwich
Did you know that if you are selling your house, you are likely to face increased cost and delayed transactions if the HIP, the Home Information Pack, is scrapped? The Conservative party policy is focused solely on the removal of the HIP with little, if any, detail on what This will leave behind. Grant Shapps, the shadow housing minister, would like the electorate to think that this will make the cost of moving house cheaper. In my opinion, this is simply not the case – on the contrary, the seller and buyer will see an immediate increase in the cost of property searches and will be left having to pay much more when moving house. The irony, is that without the HIP, the consumer will be a lot worse off! The main reason for the increase is the rise of the cost of personal property searches. Research shows that the average cost of the property searches has come down by 42pc, since the introduction of HIPs. These figures have been obtained by analyzing audits undertaken by the industry trade bodies COPSO, the council of property search organisations and AHIPP, the Association of Home Information Pack Providers. The 40pc reduction since HIPs is largely due to lower fees being charged by personal search companies due to a smaller amount of specialist HIP providers commanding high market share. Lately, competition due to lower transaction volumes and the effect of the April 2009 charging regulations have been a significant factor with regard to pricing. The charging regulations introduced the concept of “cost recovery” of local authority data. This has reduced the cost of many council searches and while the cost of local authority data for personal searches has actually increased, personal search prices have not increased significantly due to increased competition pressures. In addition to added cost, the consumer will also be exposed to the potential of further loss associated with the return of increased abortive sales, as well as the stress of longer transactions. Hips are indeed a funny old game – it was not too long ago when the National Association of Estate Agents (NAEA) was falling over itself to knock every opportunity provided by the beleaguered HIP. There were constant accusations that the HIP was nothing more than an unnecessary and costly barrier to speculative sellers and how this was in turn causing a major housing shortage. What a difference a couple of months of a recovering property market has had on estate agents. We have seen Gary Smith, the President of the NAEA, write an open letter to the OFT in response to its survey on home selling in which it would seem estate agents are beginning to see the HIP in a more favourable light. Is this really a turning point, can the NAEA really now be saying it recognises the importance of the HIP and of how it is providing protection and benefits for the consumer? If it is, I am not surprised as many of the estate agents I have spoken with clearly support the aim of the HIP. Though they feel it could be improved, they are firm in their view that it should remain. Returning to a system that was clearly not working is simply not an acceptable option.
David is on 01603 275100.