Flats to be hit by Hips rollout

Permalink: Flats to be hit by Hips rollout
by Kay Murchie

Last week saw the announcement from the Government that Home Information Packs (Hips) are to be extended to include all properties from December 14 but the move was criticised by many and said could be harmful to first-time buyers.

The Royal Institution of Chartered Surveyors (Rics) said the full roll-out of Hips will affect first-time buyers chances of getting on the property ladder. A spokesperson for Rics said a shortage of smaller properties for purchase will force first time buyers to remain in the lettings market where rents are already escalating at the fastest pace in nearly a decade.

However, many believe that the Hips rollout will be disastrous for the flats market. As well as all houses, flats also require a Hip but the Government has confessed that it will be a difficult task to provide a Hip for leasehold properties (which is virtually every flat in the UK) and they won’t include important details such as service charges, building insurance documents and repair costs.

The seller of a flat has to pay for a Hip but the buyer can expect long delays as they have to obtain these important bits of information.

In spite of this,the Government has still insisted that Hips are required for flats but said that leasehold properties do not require this vital information which can only be provided by the freeholder and their managing agents.

Duncan Samuel of Convex.net, the online conveyancers, said it was a ridiculous situation for everyone buying and selling flats when Hips are rolled out in mid-December.

Mr Samuel added that there is no point a seller going to the time and expense of getting a Hip if the important details, which traditionally hold up the sale of flats, are not included. Mr Samuel continued that the Government said it will review the situation in the next 6 months but the freeholders and their managing agents hold this information and that will not be changing in 6 months.

Research from Convex.net has established that obtaining information on the lease can take anywhere between 2 and 6 weeks. To speed up the process, the company has formed partnerships with major managing agents such as County Estates, Pembertons, Stonedale and Solitaire. These agents handle over 50,000 properties so delays in transactions are kept to a minimum.