In 2007, the Government decided to bring into mandatory force the introduction of the Home Information Pack or as more commonly known, the HIP. This pack contained vital information for the conveyancing process to include Sale Statement and searches, Title documents and an EPC, or Energy Performance Certificate.
On the face of it, some incredibly useful documentation to have on file, before the property gets marketed, in an attempt to streamline and speed up the conveyancing process and to reduce abortive sales, gazumping and gazundering. The requirement for the HIP created a wave of new companies set up to assist, usually the Estate Agent, and produce the packs ready to market the property. By 2010 however, the HIP was scrapped by the in-coming coalition Government and never to be seen since, save for the one surviving element being the EPC.
So why did they fail?
Put simply, Solicitors didn’t like the fact that they were being presented with third party information that they were required to work from. Their preference, as is still the case today, is to request their own property searches, to review the now standard TA6 and TA10 forms to satisfy their due diligence on behalf of their purchasing Client. The ever increasing requirement for solicitors to tick every box imaginable on behalf of their client and their mortgage lender so they are not held personally responsible for any mistakes or missed detail, perhaps makes us realise why this is the case.
The packs also cost money – often ranging between £300-£1000. This cost was for the Vendor to pay upfront, but sometimes would be subsidised by the Estate Agent. I remember offering the perk to my clients of a ‘FREE HIP’.
It was also the Agent’s responsibility to ensure the packs were ready and in place prior to marketing the home which could considerably delay the property launching to market. The cost, as well as the time taken to produce the packs was a turn off for many potential sellers and was cited as a possible contribution to the housing crisis in 2009-2010. Overall, those-to-be property sellers were discouraged from even attempting to dip their toe into the adventure of selling their home, leading to a shortage of new properties coming to the market.
But, with average transaction times recently increasing to 150 days and abortive rates at 30%, would we not be better to have a new ‘version’ or a replacement HIP, to aid all those trying to move? The Law Society recently introduced standard Protocol forms such as the TA10 and TA6 so ALL conveyancers would work in the same way, using the same documents in the same format. Maybe a similar requirement for vendors to have these documents ready and completed by the time they accept an offer from a prospective purchaser would help speed up these transaction times.
In addition, a ‘Sale Ready Pack’ to include these documents, plus property searches and where applicable, leasehold management packs would make for a speedier premium property buying/selling experience.
An online portal with access to search records, Land Registry associated documents such as the property Title and completed TA6 and TA10 forms could be the answer in the digital world we find ourselves living. If AI can do what it can do, access to these elements should be readily and instantly available to whoever needs them – but the biggest question will be, who foots that bill?
Until then however, have a read of our thoughts on being ‘Sale Ready’ as a simple and free alternative to the HIP…