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HIPS: first results

from "UK Landlord" magazine, May 2008

The Department of Communities and Local Government has published research showing that buyers often do not see the Home Information Packs (HIPs) commissioned on their prospective purchases.

As from last December, all homes marketed in England and Wales need a HIP, and current Government data suggests that the majority of HIPs are now being provided within 14 days at a cost of around £300-350.

Before the national launch of HIPs, the Government commissioned trials of the new legislation to see where improvements could be made to the HIP documentation and process. The area trials took place between November 2006 and April 2007 in Bath, Cambridge, Huddersfield, London, Newcastle, Northampton, North West Wales and Southampton. The study tracked over 2,600 HIPs for properties.

The findings showed that only four in ten buyers (40 per cent) were given the opportunity to see the HIP on a prospective purchase property, half viewed it after they made an offer on their property, and onethird of buyers (32 per cent) were unaware that their property had a HIP at all. The report highlights that 58 per cent of buyers would have liked the opportunity to see the HIP earlier in the process. However, agents were either not showing the packs or providing them too late to consumers to make a difference, according to the findings.

The Government is keen to remind agents of their responsibility to make sure HIPs are readily available so more people fully benefit from the packs, and has undertaken an awareness raising campaign aimed at the industry. The report showed a majority of buyers (84 per cent) had a survey completed on the property they purchased, regardless of whether they saw the HIP or whether a Home Condition Report about the state of repair of the property was included. Half had a Mortgage Lenders' Survey (Valuation), just over a third commissioned a Home Buyers' Survey, and 16 per cent ordered a Full Structural Survey.

The research also recorded 72 per cent of sellers being satisfied with the HIP, 79 per cent agreeing that it contained everything expected, and 81 per cent understanding the documents, including their energy rating, from A-G, in the Energy Performance Certificate (EPC). The majority of buyers (75 per cent) trusted the information contained in the HIP and four in ten (38 per cent) expressed a great deal of trust in the information contained in the Pack.

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