“HIPs are Dead – but beware the trap!”

The suspension of the requirement to have a Home Information Pack (or HIP) has been welcomed across the property sector. From now on nobody has to have a HIP.
This is really good news if you are thinking of selling, but are worried about the possible delay and costs involved in securing a HIP in time. It is also good news if you are one of those clients “quietly” on our books, who could be tempted to consider selling if the right buyer comes along. Many such excellent opportunities were thwarted by HIPs.

There is however, still a requirement to have commissioned an Environmental Performance Certificate (EPC) although you do not have to have actually received it prior to marketing. An EPC is generated by a qualified Domestic Energy Assessor and can be actioned as soon as we visit your home for an initial marketing meeting. But it need no longer delay the marketing of your property. People are generally much more interested in a property that is new to market so time is of the essence and we aim to act extremely quickly when a property comes to market.

Fortunately, with two qualified Domestic Energy Assessors in our offices, we are able to provide this vital document quickly.

And, if you instruct Blakes to sell your home, it is free of charge.

However, when other sellers may be breathing a sigh of relief at the demise of HIPs, don’t fall into the trap of being caught out – as in the “old” days! So often a buyer would be found, only to find that the seller’s solicitor had not even been appointed – let alone made a start on preparing the various required documents.
Our advice is therefore to consider securing some form of HIP anyway during the early stages of marketing.

By having most of the required documents in place early on, your sale is more likely to proceed smoothly and you will be reducing the window of opportunity within which it could fall though. Your solicitor will be pleased to deal with this, or we can arrange this for you if you wish on a "no move, no fee" basis.

To quote Henry Ford, “Before everything else, being prepared is the secret of success”.

HIP HIP Hooray, HIPS are History (but you still need an EPC)

Sellers and estate agents are no longer required to have or to provide copies of HIPs with effect from 21 May 2010.

In an important step at a point of fragile recovery in the housing market, Communities Secretary Eric Pickles and Housing Minister Grant Shapps announced that with immediate effect, they are suspending the requirement for homeowners to provide a Home Information Pack (HIP) when selling their homes.

Mr Pickles laid an Order suspending HIPs with immediate effect, pending primary legislation for a permanent abolition. The Secretary of State has taken this swift action in order to avoid uncertainty and prevent a slump in an already fragile housing market. Today's announcement sends a clear message of encouragement to people thinking of selling their home that they can put it on the market with less cost and hassle.

HIPs are currently holding back the housing market because sellers are having to fork-out extra cash, sometimes hundreds of pounds, just to be able to put their home up for sale. Suspending HIPs will reduce the cost of selling a home, remove a layer of regulation from the process and provide a welcome help to the housing market during the recovery. It will also mean a saving for consumers to the tune of £870m over ten years, giving sellers more money in their pocket to spend in the wider economy.

Mr Pickles and Mr Shapps also said that the Government is determined to help people reduce their energy bills, improve our energy security and tackle climate change by increasing the energy efficiency of their homes. Sellers will therefore still be required to commission, but won't need to have received, an EPC before marketing their property, and the Government will consider how the EPC can play its part in the new drive for a low carbon and eco-friendly economy.

HIPS were introduced in 2007 in an attempt to reduced the number of property transactions falling through as the attrition rate is typically around 30%. Flawed from the start; this new dogma was somewhat undermined as demonstrated during the consultation period when I asked a senior civil servant why all the paperwork had to be in place before a property went onto the market. She replied "to enable buyers to pull out more quickly."

HIPs ultimately had no impact on the number of abortive transactions as buyers showed no interest in them. However their high up front cost undoubtedly deterred many hard up homeowners from selling thus reducing consumer choice in a very difficult market.

HIPS will be missed by no-one (except the HIP providers) and I am delighted to offer vendors the opportunity to get onto the market at no cost by providing the required EPC for free. Call us on 023 92 602155 to find out how to claim youe free EPC.

New Government Good News for Property Market

Following the somewhat indecisive election result and extensive negotiations leading to our new coalition government, it seems that the property market can only benefit from the various political concessions that have been made.
Certainly the Conservatives are keen to kick-start the property market, with the permanent abolition of stamp duty up to £250k for first-time buyers, which looks set to say. Also helping first time buyers will be the gradual raising of the starting point for income tax liability to £10,000pa.
Meanwhile one of the Lib Dem concessions is to release their plans for a 1% “Mansion Tax” on properties worth over £2 million, paid on the value of the property above that level. With a market fuelled as much from above as below this is certainly a relief, although there could be some long-term Capital Gains Tax issues to be addressed by buy-to-let investors.
However, the most immediate and relevant issue affecting anyone considering selling, is the almost certain removal of Home Information Pack (HIPs) legislation. Whilst the timing is not clear at this stage, the Secretary of State does have the power to suspend the law at a stroke. HIPs have not been popular, primarily because of the restrictions of proactive marketing of a property at an early stage until a HIP has been completed – frustrating many a keen seller. The requirement to have a HIP also deterred some speculative sellers – just when the market needed them!
Whilst the idea of getting various documents in place as soon as a property hits the market is fundamentally a good idea, and we would recommend vendors continue to do this voluntarily. The Energy Performance Certificate element remains a European Union regulation, so this is set to stay, although how this will be managed is as yet unclear.
In all, it therefore looks like the market is set to move on apace, especially with a 24% improvement in mortgage lending and historically low interest rates probably around for some time yet.
With the election issue now resolved, a degree of optimism in the air, and increased activity levels in our offices, this looks to be a healthy market for buyer and seller alike.