How Will New Hips Rules Affect The Market?

[jocohen]

How much do they cost and how often do they need to be renewed?

It does sound vaguely useful. Do buyers get them automatically or only if you request them

[huw]

What the property market needs is a fundamental change in the law, in that an agreement between a seller and a buyer to exechange a property for X amount is legally binding by both parties at the time of offer and acceptance, subject of course to satisfactory surveys and searches.

But where would be the box-ticking in that?

This country needs to provide more jobs for hard-working box-tickers.

[tim123]

In principle, I think HIPS (and the EPC) are great - a house is a major purchase for most people and a better informed buyer can only be a good thing. It may be hassle upfront for the seller but will probably lead to more robust chains.

I can see why EAs don't like them (in any sales situation Knowledge=Power) but they would seem to be good news for buyer and seller? (unless the seller is trying to hide something). If you are selling a quality, well-maintained home then HIPs should act as a differentiator.

You would hardly advertise a 4 year old quality car and then say "I haven't got any servicing bills or MOT but your people can probably get hold of them?"

Buckers

I agree.

ISTM that anybody who has a problem with finding all the necessary documentation that they need to sell their house can't be that bothered about whether they sell their house.

I can understand complaints about having to pay someone else for something they have to do, but not for just collating some information that you have (or ought to have) in your posession already.

tim

[D Vardy's Shadow]

waste of time. the buyer cant rely on it, the process of buying is unchanged and the whole thing was a sham.

Not my experience.

If the HIP is wrong, then you are no better off. But if it is right and there is an issue, then the process can change to benefit of both buyer and seller.

Case in point, my experience, HIP was wrong, pulled out of purchase about 18 weeks in, over issues which could have been revealed in the HIP. If they were revealed, we would have started dealing with the issue about 10 weeks earlier. The HIP being wrong did no more damage than not having a HIP, but getting it right would have saved us a survey fee and about 10 weeks time. It would also have saved the vendor 10 weeks.

It is only HIPs done carelessly which are useless. HIPs are done carelessly because people say they are useless.

[deeplyblue]

Ask when you arrange the viewing. I've had a few emailed to me, some available online and some just haven't been done after 6 months of being on the market. If that's the case you're the first person to look at the property.

These days every house on the market is supposed to have a HIP, however long it's been for sale. From 6 April 2009, an EA can't market a house until the HIP is available.

I ask for the HIP as soon as I think a house might be worth viewing - they are nearly always available in electronic form, so all you have to do is ask the agent to send you the url, and you download it, or they e-mail it to you. The only downside is that you are telling the agent you're interested in the property - which you'd do if you wanted to view anyway.

So why not get the HIP?

The advantages of having the HIP depend on the property. Recently I discovered that the house I was interested was leasehold, not freehold - the EA said she didn't know that. The lease (all 23 pages of it) was in the HIP, and appeared to have some rather bizarre arrangements. I'm demanding more information before I even think about whether I want to buy the house. Was the seller hoping that someone would agree to buy first and discover it wasn't freehold afterwards? Don't know; I asked the EA to find out what gives a fortnight ago, and have heard nothing back. Rats, smell of.

It should also tell you if the trees in the garden have preservation orders on them (I knew someone who found they hated the tree in their garden, but couldn't do anything about it because of the TPO), and if there is a Right of Way across the property. Read some of the posts on www.gardenlaw.co.uk, and you might want to back out of any property with access issues. Of course you could let your solicitor find this out - and then back out, having paid him for something you could have found out for free, not to mention having paid for a survey, started setting moving dates and getting measured up for curtains or fitted bookcases.

(BTW, if there is any problem with a right of access involving churches - back out immediately - it can take years and thousands of pounds in legal fees to get a church to allow you to get to your parking space. The Church of England is notorious, but I'm here to tell you that others are no better. I was involved in one case where two chains - including ours - collapsed because the URC took 18 months, and all their lawyers bills, to agree to an easement which would allow someone to park a car on their own land.)

I do look at the EPC - I'm sure it doesn't tell you the whole story about a property's heating bills, but it does help.

The stuff from the Land Registry, included in the HIP, will sometimes tell you how much the owner paid for the property - if you know that before you even do a first viewing, it can help inform your bidding strategy, if you decide you want to buy.

The LR stuff can also tell you exactly where the boundaries of the property are, or - in one case I saw a few months ago - the property being sold was actually two separate sets, with the half acre of woodland having a different deed, with, potentially, a different set of conditions attached. And there are some conveyancers who might charge twice, since you were buying two separate (if adjacent) sets of land.

You think you might want to put up an extension to the side of the property? You've taken a look at the neighbouring houses, and some of them have do what you want to do - so probably no planning issues. Then you take a look at the map of the drains, and see that a main drain goes across the edge of your land, and you'll probably not be able to build. And that you wouldn't find out until you moved in and asked a builder round.

You like the look of the loft bedrooms. You'll put in a shower room and it will do for your teenagers. Then your surveyor tells you that the owner didn't bother to get building regs approval, and that the entire conversion needs redoing, so that the electrics are safe, fire regs are obeyed and the stair won't collapse once you have a couple of rugby-playing hulks running up and down it. The requirement to show building regs approval will be in the HIP from 6th April, and you'd have known that you needed to spend not £600 for a shower, but £10,000 and three months of builders hassle re-doing the entire thing. You decide to back out - but only after the solicitors etc (see list above) have been paid.

The HIP can tell you lots - and, for the buyer, it costs you nothing. And, as someone else said Knowledge is Power. Power to back out early, power to negotiate a better deal.

For the vendor, as I said above, filling in the PIQ is a pain, but you'll have to do it when you sell anyway. The HIP need not cost you more than a couple of hundred quid, and I swear some people spend more than that on fancy "throwovers" for the beds (the purpose of which has always eluded me - throwovers, not beds!).

db

EDIT: I see (having read more of thread. Memo to self: read first, post afterwards!) that others have made the same points already.

Edited March 28, 2009 by deeplyblue

[SarahBell]

How much do they cost and how often do they need to be renewed?

It does sound vaguely useful. Do buyers get them automatically or only if you request them

Most EAs wait until they get some interest in a property first -

so lots probably not got them yet.

IMO it's a good way to make the seller committ to the process.

[deeplyblue]

So right now what information can you ask for?

Does it apply retrospectively?

Direct Gov HIP information page

Compulsory documents

The following documents must be included in your HIP:

Freehold properties

* Home Information Pack Index

* the new Property Information Questionnaire (PIQ), from 6 April 2009

* Energy Performance Certificate (EPC) or Predicted Energy Assessment (PEA)

* sustainability information (required for newly built homes)

* sale statement

* evidence of title

* standard searches (local authority and drainage and water)

Leasehold properties

* all the compulsory documents above

* a copy of the lease

You say, "Does is apply retrospectively", I'm not quite sure what you mean. However, I can say that all (well, nearly all - for exceptions check the site) houses (and, I think flats, but I'm not sure on that one) on the market have to have a HIP. When they first came in there was an exemption for houses already on the market, but that hasn't applied since last October. There was also an exemption for houses that were newly marketed, so that you could start marketing a house whilst the HIP was being prepared. I suspect that this clause was being used by EAs as an excuse not to bother. If you think the house will sell very quickly, before the HIP is ready, then why bother commissioning one? If someone asked for one, you just said, "Not ready yet.", and if they were really interested, then maybe they'd buy the house without ever asking and maybe you'd get away without doing one at all. So, the rules as of 6 April 2009 state that the HIP has to be available before the property is marketed.

How much do they cost and how often do they need to be renewed?

It does sound vaguely useful. Do buyers get them automatically or only if you request them

You only get them if you ask for them, but the EA should provide them immediately - usually electronically. I think you can ask for a printed version, but it's easier all round if you take it electronically - then you can just print out the bits which you think you want to study or refer to. You do not have to pay anything for them.

Anyone can ask for a HIP on a property - it doesn't even commit you to viewing the property. Some EAs even include a link from a Rightmove entry.

[EDIT: Came across this example:

House with HIP download]

Information in a HIP does not have to be updated, whilst the property is on the market, even if it stays on the market for more than a year. You don't need a new HIP if you change (or add) agents, or if a sale falls through and you put the house straight back on the market. If you don't sell a house, wait a couple of years and then put the house back on the market, then you will need an updated HIP (since things like Rights of Way, or your level of insulation may have changed in the meantime.)

You can more information from the DirectGov site, using the link above. Usual declaration: I'm not a lawyer, and you should check with a lawyer if you suspect that anything is wrong. The above represents my personal experience and information gained from the government website quoted.

db

Edited March 29, 2009 by deeplyblue

[6538]

Yet another stupid idea. Why on earth don't they just scrap HIP both old and new?

If I were selling my self and not using an agent I'd not bother and just pay the fine if the Government man came calling.

[jocohen]

i've noticed on most sites all you get is the energy performance sheet but nothing else

[SarahBell]

i've noticed on most sites all you get is the energy performance sheet but nothing else

Only one of my local EA actively lists them and not all the time. I've had many different responses to my requests to see the HIPS.

[deeplyblue]

i've noticed on most sites all you get is the energy performance sheet but nothing else

See edited version of my post for a link where you can download the HIP. Elsewhere you have to ask for it - usually I get sent a link.

db

[johnny5thumbs]

You like the look of the loft bedrooms. You'll put in a shower room and it will do for your teenagers. Then your surveyor tells you that the owner didn't bother to get building regs approval, and that the entire conversion needs redoing, so that the electrics are safe, fire regs are obeyed and the stair won't collapse once you have a couple of rugby-playing hulks running up and down it. The requirement to show building regs approval will be in the HIP from 6th April, and you'd have known that you needed to spend not £600 for a shower, but £10,000 and three months of builders hassle re-doing the entire thing. You decide to back out - but only after the solicitors etc (see list above) have been paid.

Too true, deeplyblue. We had a scenario straight out of your post that only surfaced 3 weeks before due date for exchange of contracts when the completed PIF (now PIQ) arrived. Conservatory had been erected without building regs, and vendor inexplicably went mulish on the whole subject - we were told to stop messing around and exchange immediately, in fairly rude terms from their solicr. Tempers rose until we pulled out the day before exchange date. A fully completed PIF (or now to be called PIQ) would have highlighted that 'minor' issue and saved the whole chain of 4 properties from collapsing and total EA fees on the chain of about £20k being lost. Vendor huffed and puffed for a few days, and then withdrew.

I'm not impressed with HIPS so far, but with a modicum of foresight, one could see how they could in theory make life easier for the buyer at least, if they were done properly, and if the mortgage lenders accepted the contents without requiring duplication of work (searches etc.)

[adamLancs]

Love HIPS, although filled with a lot of boring stuff that I wish they would seperate it into two parts; one read to go with your first viewing containing all the good bits, another part to read before you consider making an offer.. local sewer systems anyone?

Anyway I've found all kind of gems in HIPS; past sale prices, tenancy agreements, rights of access, boundaries, previous works, neighbours etc not all are required of course but the more information available the easier and faster it is to look around properties.

The main downside is that there is no legal recourse for false information. Kind of defeats the objective of HIPS which I believe was to make things move faster once the sale is agreed.

[johnny5thumbs]

The main downside is that there is no legal recourse for false information. Kind of defeats the objective of HIPS which I believe was to make things move faster once the sale is agreed.

Are you sure? Can you quote your sources?

[adamLancs]

Are you sure? Can you quote your sources?

Nope that was my understanding since they came out from reading various news stories and discussions so I apologize if I am wrong.

[deeplyblue]

Nope that was my understanding since they came out from reading various news stories and discussions so I apologize if I am wrong.

I went back to the DirectGov site, and followed some links, and the best I could come up with on a very brief search was:

Q – Where can I go if anything goes wrong?

A – Depending on whom your complaint is with, there are redress schemes in place:

- All estate agents are required to belong to an approved redress scheme for HIP related complaints. The approved schemes are currently Ombudsman for Estate Agents and also The Royal Institution of Chartered Surveyors.

- Complaints relating to domestic energy assessors or home inspectors are dealt with through their individual accreditation scheme.

- Subscribers to PCCB will have formal complaint procedures in place but if you do not accept their decision or if you hear no final response within 8 weeks, then you can take your complaint to the Independent Property Codes Adjudication Scheme.

from:

Association of HIP Providers

If I see anything more in the near future I will try to post it on this thread.

If HIPs can be made to work properly, they will make buying a house a cheaper and more straightforward process - particularly they will make getting halfway through buying a house and then having to drop out a less frequent occurrence, which would be good for everyone. They need not make selling a house very much more expensive than it is at the moment - in fact they should probably be included in the fee charged by estate agents. An agent who is getting 1.5% of £400,000 for marketing a property (i.e. £6,000!) should be able to find the £250 it would cost them to put together the HIP.

db

[johnny5thumbs]

Nope that was my understanding since they came out from reading various news stories and discussions so I apologize if I am wrong.

The thing is, at the moment, with a P.I.F., any false info would def. give grounds for legal redress. But if the current P.I.F is replacved by a H.I.P. based P.I.Q, then if any porkies are treated in the same vein as the small print at ther foot of every EA's particulars (eg: "the descriptions contained herein are used in good faith as an opinion and not by way of a statement or fact and may in fact be complete porkies for which we will definitely not be held responsible".

And that would be a pretty severe downgrading of the current right to redress, if true. Shurely not !

[D Vardy's Shadow]

The thing is, at the moment, with a P.I.F., any false info would def. give grounds for legal redress. But if the current P.I.F is replacved by a H.I.P. based P.I.Q, then if any porkies are treated in the same vein as the small print at ther foot of every EA's particulars (eg: "the descriptions contained herein are used in good faith as an opinion and not by way of a statement or fact and may in fact be complete porkies for which we will definitely not be held responsible".

And that would be a pretty severe downgrading of the current right to redress, if true. Shurely not !

The PIF gives grounds for redress because it is incorporated into the contract negotiations. It is simple to fix your objection. Buyer's solicitor requests/gets HIP as part of the contract negotiations, which gives the PIQ the same status as the PIF.

[johnny5thumbs]

The PIF gives grounds for redress because it is incorporated into the contract negotiations. It is simple to fix your objection. Buyer's solicitor requests/gets HIP as part of the contract negotiations, which gives the PIQ the same status as the PIF.

Hmm ... Ok - seems obvious enough. But strangely, I don't remember my solicitor doing that 3 months ago when we were buying - unless he automatically incorporated the data without even mentioning it as a 'given' ...

I'll ask my solr. next time I have £35 I don't need

[D Vardy's Shadow]

I'll ask my solr. next time I have £35 I don't need

He needs it more than you do, I suppose.

[deeplyblue]

Hmm ... Ok - seems obvious enough. But strangely, I don't remember my solicitor doing that 3 months ago when we were buying - unless he automatically incorporated the data without even mentioning it as a 'given' ...

I'll ask my solr. next time I have £35 I don't need

I suspect that the PIF will still be required as part of the contract, and you'll just have to fill it out all over again - until the happy day comes when the legal eagles decide, after 2 years of consultation at huge public expense, that you can use a photocopy of it.

db

[deeplyblue]

He needs it more than you do, I suppose.

He doesn't have public sector pension - of course he needs it.

db

[yourfriendlyestateagent]

My solicitor, a conveyancing specialist (Browns, actually in Buckinghamshire)

charges a flat rate of £250 - no sale, no fee.

They do it in very quick time, faster (on the three occasions I have used them)

than the opposite parties.

I have no objection to this fee.

What irritates me beyond word is the EA fee, which is not only exorbitant for

what I get, but is the nail in the coffin of many a little property project profit.

That extra £2,000 - £4,000 fee makes all the difference to doing, or not doing,

a project.

Instead of your smarmy attitude to fees to enable you to profit from your wonderful projects, why not sell it yourself?

The fact that you are wrong is beside the point, (it is the estate agent getting the houses to the largest market that

creates the profit). Why else do the shrewd investors use the agent they assume to be the best irrespective of fee?