Last updated 10:36, Friday, 22 August 2008

THIS month marks the first birthday of the home information pack, but is anyone cheering hip hip hooray?

HIP happy: Christine Wilson believes the home information packs are working well.

The controversial packs (HIPs) with their essential energy performance certificates (EPCs) began their phase-in last August.

For 12 months it has been compulsory for four-bedroom properties sold in the UK to have a pack. Three-bedroom properties have needed a HIP for 11 months, and one and two-bedroom homes have had to be HIP since December.

It’s been a very long and difficult birth for one of the Government’s favourite babies.

HIPs were a twinkle in the eye of the Labour Party manifesto back in 1997, when a proposal was made to tackle the problem of gazumping.

After Labour was re-elected, it discovered that gazumping actually affected only two per cent of house sales, and a bigger problem was the slowness and lack of openness of the sales process.

In November 2003 the Queen’s Speech to Parliament announced the home information pack was on its way, designed to make house sales quicker and happier for all concerned.

HIPs were to contain: evidence of title, copies of planning regulations and consents, a local search, guarantees for any work on the property, and an energy performance certificate.

The idea was that HIPs would give buyers more upfront information about the property before they made an offer, and reduce chances of sales falling through.

The cogs and wheels of the Government slowly turned and by March 2006 more than 3,000 people were enrolled on training courses to be home inspectors for the new HIPs. Sounded good, but they couldn’t keep up the momentum.

By May 22, 2007, it was clear there would not be enough qualified inspectors for the official HIP launch on June 1. Poor Ruth Kelly, as new Communities Secretary, was forced to call an embarrassing postponement until August.

And now, even though the property-size phases of HIP roll-out are complete, the Government is still holding-off on mandatory first day marketing – the requirement to make available all HIP documents on the first day a home goes up for sale.

So with all these trips, hiccups and stumbles, is there anyone out there who loves the HIP?

Well, yes. Christine Wilson of hipsnortheast.com. says: “We have had a fantastic year. It’s been really hard work but estate agents and developers across the North-East have been really supportive.”

Christine’s hipsnortheast.com portfolio includes local housing developers who now have to comply with new legislation on EPCs and HIPs. She also recently launched northeastenergyaudit.com as a sister company to hipsnortheast.com to meet the demand for EPCs.

According to Christine, business in this area has steadily increased as landlords, letting agents and providers of social housing gear up for October 1 when all empty rental properties will need an EPC before they can be rented.

Also chipper about HIPs is Paul Broadhead, of the Association of Home Information Pack Providers (AHIPP). He says the packs shave about 12 days off the time taken to exchange contracts.

“Even in their present incomplete form, HIPs are already having a positive impact on the market,” he said.

But while Christine and Paul are upbeat, a recent study by the Law Society has revealed that putting properties up for sale without ordering a home information pack is widespread.

The Law Society says that in some cases HIPs are not available until weeks after the property goes on the market. It believes this is because sellers are reluctant to pay around £400 for a pack while they are getting less than they hoped for their houses.

President of the Law Society, Paul Marsh, says: “The evidence we’re receiving from right across the country – be it Cornwall, London or the North East of England – is that solicitors are not receiving a HIP when the deal is struck. We’re not getting a HIP until three to four weeks later, sometimes not until exchange of contracts.”

And Henry Pryor, of property website Primemove.com, has calculated that as many as one in 10 of sellers do not have a HIP.

“About 130,000 houses went on to the market in May, but only 89,000 HIPs were commissioned,” he said.

A new YouGov poll has found that only five per cent of people think the compulsory sales packs have delivered benefits. Another 68 per cent said they had failed to make a positive difference. This suggests the general populace are not convinced that it’s cool to be HIP?

Neil Foster, of Foster Maddison in Hexham’s Priestpopple, sympathises with the harassed house-seller.

“Home information packs were originally conceived by the Labour Government in 1997 as an initiative to counter the practice of gazumping,” said Neil.

“Eleven years on with transaction activity in the residential market at a 20-year low and punitive Stamp Duty charges for all but a small proportion of buyers, the purpose of the HIP is difficult to comprehend.

“HIPs have not helped the house buying and selling process one iota and I would suggest that the Government should really own up to the fact that this has always been a subliminal vehicle for introducing energy performance certificates on domestic property for the purpose of assessing council tax charges against energy efficiency.”

Neil has a point. Figures show more than 700,000 UK homes now have energy ratings as a result of HIPs.

Timothy Hawe, of Strutt and Parker’s Morpeth office, comments: “One year on we have found HIPs to be irrelevant to the property market.

“Potential purchasers are not interested in them and solicitors don’t trust or use them. Therefore I would suggest they are either scrapped or continued in a form which is relevant to the market.”

Suzanne Graham, who has an office in Front Street, Prudhoe, says the same.

And at Northumbria and Cumbria in Hexham’s Fore Street, Joyce Douglas is just as tough on HIPs.

“I would be in favour of scrapping HIPs. It is an extra cost that sellers could do without,” she said.

“Although a HIP is valid as long as a property remains on the market, some documents within the HIP go out of date and have to be paid for again when the property goes under offer; ie, the search.

“We received very few requests for purchasers to view the HIP and it gives the agent extra administration work. On a positive note I think the energy performance certificate is definitely well worth keeping.”

Meanwhile, the Scots are planning their own revamped HIP from December 1, and if or when a Conservative government is elected, the party has promised to bin the HIP altogether.

Happy birthday HIP!