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September 4, 2007

Sellers put off by Home Information Packs

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by Kay Mitchell

Sellers put off by Home Information Packs

Over 10 years ago, when Labour entered government, it was promised that home information packs (Hips) would transform the way people in the UK buy and sell houses. However, many believed it would just create unnecessary paperwork and add hundreds of pounds to the cost of selling a home. In addition, it could put off many people from selling their home.

Following a couple of glitches, Hips were enforced at the beginning of August, initially for properties with 4 or more bedrooms, which account for just 22% of the market. From 11th September, however, Hips will be extended to cover 3-bedroom properties and according to the property consultancy, Hometrack, this means more than 70% of housing stock in England and Wales will come under the legislation.

A month after the launch, Hips appear to have put off the speculative sellers who have traditionally put their houses on with agents to test the market. The number of 4-bedroom homes on sale has fallen significantly in the last month.

There has been a mixed reaction from estate agents, Jackson-Stops and Staff based in Chester has received just one instruction that required a Hip whereas Savills in Reigate, in the middle of the Surrey commuter belt has at least 12 properties in its window with Hips.

A spokesperson for National Association of Estate Agents (NAEA) is aware of one agent who has not received a single instruction for a 4-bedroom home since the launch of Hips. The spokesperson remarked if this trend proves to be widespread and become apparent with 3-bedroom homes then worries in terms of lack of supply will be realised. According to the NAEA, it will do nothing but help house-price inflation.

Furthermore, the Hips continue to be inundated by complications, the latest problem is searches (information relating to issues such as planning consents and building regulation approvals) which has to be included in the pack.

HSBC recently warned that it might not accept the searches if they had been conducted by a private company and would require buyers to pay to conduct their own search. HSBC added that if a person wants to buy a house from someone who has a Hip containing a personal local search, they would inform their solicitor that they would not lend them any money unless they carried out their own search.

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