Speculative Selling and Home Information Packs

One of the arguments advanced by the Anti-HIP lobbyists and the Conservative Party is the Home Information Pack, or rather the cost of the HIP, is preventing the speculative seller from entering the market. Why pay £350 if purchasing your HIP from an estate agent, or under £200 if purchasing from a reputable HIP supplier, when you do not know if you are in fact going to sell?

Personally I believe it is good for the stability and absence of ‘boom and bust’ trends for the speculative seller to be excluded. Furthermore, I do not believe the cost of the HIP is the main reason for a seller deciding not to market. Surely the fear of job loss and the ongoing difficulty of getting a mortgage are far more rational explanations for this purported problem.

Leaving to one side however these political issues, there remains a lack of consumer education on some basic and fundamental aspects of the HIP Regulations. This is mainly down to the failure of front end sellers, such as estate agents.

How many estate agents have taken the bother of reading through the Regulations and Explanatory Notes? How many agents are actually interested in understanding the ‘ins and outs’ of the Regulations? Don’t get me wrong there are a high number of professional agents around who have embraced HIPs and who take the time to speak with the seller and to explain the HIP and its purpose.

In the main however the failure to take the seller through the process and to explain for example how long a HIP is valid for and the instances when a new HIP will be required has led to a cloud of misunderstanding that continues to provide the anti-HIP lobbyists with ammunition.

So let’s try and make it clear. A Home Information Pack is valid for 12 months from the date the seller’s property is first offered for sale. This means the speculative seller can have the reassurance of knowing that if they purchase a HIP, say for £199.00, this expenditure will not be wasted if within a month or two a decision is made to take it off the market providing it is put back, again perhaps to test the market at a later date, within that 12 month period. The property can come on and off as many times as the seller likes providing it is placed back on the market (if it remains the intent to continue marketing) within that 12 month period.

Anti-HIP propaganda gives the impression that it would be necessary to update the content of the HIP such as searches. This is nonsense. Once the HIP is created the content remains valid for so long as the HIP is valid. The searches may become out of date by the time they come into the hands of the buyer, but this is of no consequence to the seller as it will be the buyer who will be required to update. Sellers who are advised to update searches in these circumstances are being given wrong and perhaps negligent advice.

Don’t lose a tear for the buyer as the cost of updating the searches is minimal. In fact some search providers will update for FREE. The Buyer can also take out insurance to extend the life of the existing searches at a cost of £10 or £12.

So the speculative purchaser decides to take the property off the market but later within the 12 months puts it back on. Providing the property remains on the market beyond the 12 month period it still can be taken off and put back on providing that after 12 months the property goes back on within 28 days of an offer for that property being rejected. This can continue to happen indefinitely. A new HIP would only be required if the property does not go back on within that 28 period. Furthermore even after the 12 month period no content within the HIP needs updating. It will as say remain valid for so long as the HIP remains valid.

So in conclusion a speculative purchaser should not be put off from testing the market. Providing these rules are known and adhered too there should be no problem of facing the cost of paying for more than one HIP.

  

A final note.....if some estate agents sincerely believe that it is the HIP that is stifling the property market why, I would ask, do they not offer to meet the cost of the HIP themselves. Surely the benefit of speculative selling that they continue to claim to be an important part of their business, is worth more to them than the cost of a HIP at around £199

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