Page last updated at 12:38 GMT, Saturday, 2 August 2008 13:38 UK

Agents 'breaking home pack law'

By Sarah Pennells
Personal finance reporter, BBC News

For sale boards
The Law Society said some sellers do not see the point of Hips

Some estate agents in England and Wales are breaking the law by marketing properties without ordering a Home Information Pack, the BBC has learned.

The Law Society says in some cases, Hips are not available until weeks after the property goes on the market.

It believes sellers are reluctant to pay for the pack when the housing market is slowing.

The packs, which can cost up to 400 and contain information such as deeds and searches, were launched a year ago.

Hips also contain other information useful to any potential buyer such as any recent planning permission or building consent given on the property, and an energy performance certificate.

Upfront information

HOME INFORMATION PACKS' CONTENTS
Evidence of title
Copies of planning, listed building or building regulations consents
A local search
Guarantees for any work on the property
An energy performance certificate

The idea was they would give buyers more upfront information about the property before they made an offer, and reduce chances of a sale falling through.

However, in the current troubled housing market, it seems some estate agents are not commissioning Hips when the property goes on the market, something which by law they are supposed to do.

Paul Marsh, president of the Law Society, says the practice is common across England and Wales.

"The evidence we're receiving from right across the country, be it Cornwall, London or the North East of England, is that solicitors are not receiving a Hip when the deal is struck.

"You would have expected that the Hip would be available immediately the agreement [to accept an offer] is reached.

"We're not getting a Hip until three to four weeks later, sometimes not until exchange of contracts."

'Aggravation'

I've had a Hip in place since November and... nobody's ever asked to see it although we've told them that there is one available
Joan Newcomb, home seller

Mr Marsh also said sellers were not convinced by Hips.

Henry Pryor, who set up property website Primemove.com, has calculated that at least one in 10 of sellers do not have a Hip.

"About 130,000 houses went onto the market in May, but only 89,000 Hips were commissioned," he said.

He said some of this figure could include sellers remarketing their homes, but that "about 15,000 people put their house on the market without first commissioning a Hip".

Money well spent?

A spokesperson for Communities and Local Government said: "Home sellers have to have commissioned a Home Information Pack when they put their house on the market and after 28 days a Hip must be purchased."

They said more than 700,000 homes now had energy ratings as a result of Hips.

National Association of Estate Agents call for HIPs to be scrapped

On average a Hip costs between 300 and 400 - and although the vast majority of those who put their property on the market do obey the law, they are not all convinced it is money well spent.

Joan Newcomb, from Redhill in Surrey, put her four-bedroom house on the market last September.

Her Hip took over two months to arrive and cost about 300.

"If I had the choice now I wouldn't buy a Hip. I can't see what value it has," she said.

"I've had a Hip in place since November and it hasn't helped us sell the house. Nobody's ever asked to see it although we've told them that there is one available."

Transaction times

However, according to LMS, the biggest provider of Hips, the fact buyers are not interested in a Hip does not mean they are worthless.

It says its research has indicated Hips are reducing transaction times. "The Hip itself, the majority of the information is quite technical like title, like searches, and it's not really for the interest of the individual consumer," said Dominic Toller of LMS.

He said that once potential buyers had chosen the home they wanted to purchase, then having a Hip available meant that conveyancers had " a whole pile of the information they need" readily available.

'Stealth tax'

Nick Salmon, is a member of the board of the National Association of Estate Agents, and heads the Splinta campaign against Hips.

"I have never yet had a buyer ask to see a Hip on a property," he said.

"They ignore it. It is usually when the solicitor asks to see if there is a pack there that we provide it. The pack is of no interest to buyers and is considered to be a stealth tax by sellers."

But the government says that Hips are already bringing down the price of property searches by improving transparency in the house buying process.

It now wants to add a property information questionnaire to a Hip, while Scotland is planning to introduce its own version of a Hip from 1 December.





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