HIP loophole plugged

Homeowners hoping to avoid paying for a home information pack (HIP) by putting their house up for sale before they become compulsory next year could be disappointed. The government has announced that properties put up for sale before June 1st 2007 will have a five-month period of grace where they do not need to have a home information pack. But, if the property is not sold by October 31st 2007 the owner will either have to fork out £600 - £700 for a home information pack, or take it off the market. The potential loophole was closed by new regulations laid before Parliament this week, in a move welcomed by the Association of Home Information Pack Providers (AHIPP). Mike Ockenden, director general of the AHIPP, said: "This will stop any companies making money from prospective house buyers by listing their houses as on the market prior to June 2007, in the belief that they would never need a HIP. "Any home without a HIP after June next year will be at a distinct disadvantage against properties that do have a HIP, containing a valuable home condition report, and vendors run the risk of not being able to sell as quickly or even at all. "As a buyer which house would you favour? One which has s free condition report to one that does not." However, the National Association of Estate Agents (NAEA) questioned whether the regulation was really necessary. Peter Bolton King, NAEA chief executive, said: "Buyers who wish to purchase a property from June next year will view some properties that have HIPs and other that do not. Buyers are likely to want to compare HIPs for every property they consider. "This demand may mean that sellers are forced to pay for HIPs whether or not they are legally required to." The regulations confirm that homeowners will have to wait for the pack to be compiled before they can market their property a process which estate agents claim could take up to 14 days for leasehold properties. "We remain bitterly disappointed that the government has not paid heed to our warning about the impact a delay in marketing will have on the housing market and the economy as a whole," Mr Bolton King added. "We remain gravely concerned that due to the amount of information required for leasehold properties, few will be able to be marketed before the 14-day period is up." The government is introducing home information packs, which will contain all the legal documents required for the sale of a property along with a report on the condition of the home, to cut the £350 million wasted each year when sales of properties fall through. "For too many people, buying or selling their home is still a real nightmare, with long delays and duplication," said housing minister Yvette Cooper. "People should be entitled to proper information at the beginning of the process. We know there are still vested interests who make money out of the current system and who are opposed to reform, but this is about getting a better deal for the consumer." However, research by the NAEA shows sellers are concerned by the time it takes to put a home information pack together and by the expense. The wait may lead homeowners to miss out on the property they wish to buy or may put them off from going for it altogether. "First day marketing is a fundamental right for every homeowner and its removal will have a huge impact," Mr Bolton King concluded.