Interview With The Hippy (HIP Consultant)

HIPS are a waste of money

It’s been a while since I’ve touched the whole Home Information Pack (HIP) saga. In fact, what’s the deal with those again? From what I remember, it’s just a ridiculous ploy for the rich to get richer, and the poor to get poorer by dishing out more money on the already expensive process of buying/selling property.

Having said that, I still like to know what’s going on in the world of Home Information Packs because one day I will be selling, so I’d prefer to be informed. I guess it must have been fate when I crossed paths with a consultant from over at HIP-Consultant.co.uk. Obviously I took full advantage of the encounter and requested for a cheeky Q&A session so I could dig my claws in a little. Or worse yet, actually learn to appreciate the packs and understand what they’re about, beyond the whole ‘Sheriff of Nottingham’ antics, of course.

So here’s what the HIP consultant had to say for himself when I hit him with a few of my finest questions.

Before I try and provide a few explanations/answers to your questions just wanted to thank you for allowing me to come across to your blog which you know am a regular reader of. Hopefully I can offer a different point of view on the Home Information Pack (HIP) legislation which maybe some of your readers may not have considered.

1) A lot of people are very much against the HIP’s because they think it’s a waste of time and money, which not only slows down the process of a sale, but also makes it a more expensive process. Of course, I’m guilty of being one of those people (I’m the head cherrleader, in fact). How do you respond to those kinds of statements?

I understand many people believe similar to yourself and you certainly are not alone in holding these views. If I could explain that the majority of the contents of a HIP have always been ‘required’ in the buying and selling process. For e.g. Land registry documents, leasehold documents, searches. These have always been prepared; traditionally by a conveyancer. So the major difference is that we now provide the documents at the start of the process.

The new addition is the Energy Performance Certificate (EPC) which when selling a property is included within the HIP. I am sure your readers are aware that this provides an assessment of the energy efficiency of the property when assessed, alongside offering practical recommendations to improve this rating. Often by following the low cost measures you can make good savings on your utility bills and also has a positive impact on your carbon footprint. Which lets face it is never more relevant than now with British Gas recently putting up prices; gas prices by 35%!! Granted that some people are not interested in saving the planet, though am yet to meet anyone who isn’t interested in saving a few quid on bills if it can be easily achieved.

I have digressed a little and will try to comeback to your points.

Cost wise – we have seen reductions in the major fees within the HIP i.e. search fees. This is solely due to Home Information Pack legislation and most HIP providers have passed these savings onto clients. As I have stated these documents are now being prepared by ‘HIP providers’ instead of conveyancers; whom some may have reduced their fees to reflect this.

Time wise – one of HIPs major goals was to help speed transaction times up. There is not a great deal of evidence due to the slow current housing market. However, Connell’s solicitors have publicly stated that on average since HIPs were introduced their average transaction time has increased by 12days. There is other similar evidence been put forward though unfortunately at present the media are not inclined to widely report this.

2) I’m still actually unclear on the pricing structure of the packs. I’ve seen some relatively cheap packs, but also some wild cowboy quotes that make me a little nervous. So how much does a pack basically cost? Do the prices vary depending on the size of the house and the consultants you use?

HIP pack cost can vary in price and as with most things the price is set by the market place and the provider. The average cost is about £350 and I am pleased to say we are able to beat this price without sacrificing quality or service. Some providers base their fees on size of property, though I have been against this from the outset and we certainly do not have this type of pricing structure. The same documents are required whether it be a 1bed flat or a 4bed detached house. Where we do differentiate as is standard, is based upon the tenure i.e. freehold or leasehold. Leasehold properties require additional documentation therefore unfortunately cost more.

I am in complete agreement with you on the ‘budget’ HIPS, they make me very nervous though it would not be right for me to make any further comments on this. I don’t fancy a law suit against me.

3) From what I’ve seen, HIP consultants/providers provide different pieces of information with in the packs. What does a vendor actually need in their pack to actually sell their property legitimately? What are the mandatory documents?

We have provided masses of resources over at our site, including highlighting each ‘compulsory’ and ‘optional’ documents within a Home Information Pack and each document is explained individually.

Though a quick summary of documents is as follows:

Home Information Pack (HIP) Index
Energy Performance Certificate (EPC)
Sale statement
Standard searches
Evidence of title
Additional information for leasehold and commonhold sales, where appropriate.

4) I’m not convinced that anyone will even pay any attention to the pack itself. People buy homes based on fundamental factors such as price, location, transport, and the look/condition of the property. If those 4 key factors are spot on, do you think the energy efficiency levels will even matter to the average joe?

This is a major issue at present there is no doubt. It has been suggested that Estate agents are not pro-actively promoting the viewing of Home Information Packs and few buyers seem to be asking to view the packs even though they should be freely available. The government has agreed that this is a current failing of the packs acceptance and popularity; measures are being put in place to improve this.

The factors you mention will always play a large part in a decision to buy a house or not; a HIP certainly will not change this though it was never designed to do so. However, if you looked in the HIP and saw that they were planning to build a new supermarket across the road to the property you were considering making an offer on, would you reconsider and be grateful you had been supplied this information? I guess so.

5) What percentage of people do you think would require the packs if they were optional?

The truthful answer is very few at present and probably closer to zero than 10%.

6) Why should we be thankful for the packs? What advantages do they provide for buyers and sellers, in your opinion?

When we made offers in the past on properties, what information did we have at our fingertips prior to making this offer? Very little. What other product/purchase are you given such little information on prior to being expected to make an offer? Let’s remember property is for many the biggest purchase of their lives. Very few. Consider the information provided for all kinds of products and compare to property.

At present the information may not be massively interesting to home buyers though this does not detract from the usefulness of it in the home buying/selling process. Recently, we have been able to resolve an issue thrown up by the Home Information Pack we were instructed to commission. If this had not been addressed it could have potential added weeks to the transaction time and could have ultimately led to the sale falling through.

The Home Information Pack will be developing for sure and we will be regularly updating our blog on these developments, which Property Investment Project have kindly linked to. The Property Information Questionnaire (PIQ) is planned on becoming a mandatory document on 1/1/09 and this will provide useful practical, ‘user friendly’ information that will provide further interest to home buyers for sure.

7) Finally, just to give your site a half decent plug (and to settle some personal curiosity), why should I use your HIP consultancy agency? What makes you better than the others out there? Feel free to gloat.

HIP-Consultant.co.uk is an independent family business focusing on a high level of customer service and satisfaction. We solely specialise in Home Information Packs and Energy Performance Certificates therefore you can rely on ‘our’ expertise, efficiency and receiving a cost efficient solution when requiring either of these products/services. We are happy to offer impartial advice with no obligation to all Property Investment Project readers.

I would like to thank Property Investment Project for the opportunity to answer some of their questions. I hope we have provided an insight into the benefits and positive aspects of Home Information Packs.

My final thoughts

Admittedly, that was quite educational. For one, I didn’t realise (or maybe I did, but just forgot) that the packs included documents that a conveyancer would normally aquire. On that note, have conveyaners reduced their fees for the less work they have to do? I’ll take a stab in the dark and say….No. But perhaps our consultant could shed some light on that issue to confirm?

While I can now understand that tree-huggers and penny pinchers would benefit from the packs, I’m still reluctant to believe that the average person would constructively use the packs- so perhaps they should be optional- so everyone that wants to benefit, does benefit.

However, I can sort of see the point of them, but who needs the extra costs? It’s expensive enough to buy/sell already…and that’s always been my argument.

Once again, many thanks to the guys over at HIP-Consultant.co.uk, and I wish you luck with the uphill battle in convincing the mob that the packs are a good idea. Unfortunately, I’ll be on the other side of the line, convincing people to get the packs to be made optional, free or abolished!

If you have any questions about the HIPS, just ask away, I’m sure they’ll get answered by our consultant =]

4 Comments- Join The Conversation...

Guest Avatar
anne 13th August, 2008 @ 19:04

hi,

That was a great read and perfect timing because im in the process of selling. I'm indifferent about the topic but i can see why people are opposed to the hips and vice versa.

I do have one question though. The estate agents i'm using actually told me that they charge the packs based on the size of the house because it requires more time to put together, and pricing guidelines is set by the government. But from what i just read, its down to the actual distrubiters of the packs to choose how they want to structure their pricing? Was I lied to because i'm selling a 5 bedroom property.

i'd be extremely grateful for your thoughts on the matter.

many thanks,
Ann.

1
Guest Avatar
Stuart Wallace 13th August, 2008 @ 19:16

Hey m8,

I have 2 questions, hopefully you can help.

1. I remember reading that HIPS only applied 2 bedroom houses. Is that true?

2. Like with letting agent fees, can you haggle with the HIPs prices?

cheers

2
Guest Avatar
Richard Large 14th August, 2008 @ 15:27

answers:
HIP pricing is everywhere. The cost of the EPC is most likely to vary according to house size but many are a fixed cost. EPCs ought to cost around £80-100 typically; some desparate people do them for less.
The rest of the HIP is really only the searches and Land Registry cost; searches vary enormously from council to council. Problem with cheaper personal searches is that many buyer's solicitors won't accept them - that is one reason why these have a bad name with many solicitors who ask for the full searches, thus duplicating and increasing costs. Also a Land Registry title HIP should be rather cheaper than an unregistered title - most are now registered.
Go to your local council website & see (usually under Land Charges) what they charge for a search - it can vary from around £75 up to about £300. For the same stuff. Quite daft. The other costs are trivial, Land Registry is £6 for the title and plan.
All homes going on the market need a HIP (with some very rare exceptions) - the bedroom number phasing in ended last December.
As regards haggling, think of it in precisely the same way as when you go to ask a solicitor to handle the sale or purchase of your house. If you would haggle with them, fine, haggle away. It's just about the same situation. In fact, really, it should be the solicitor who puts the HIP together - it's whatr they always used to do (obviously they have to get an energy assessor to do the EPC).

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Guest Avatar
Paul 19th August, 2009 @ 12:09

Well, my recent experience of selling a property (me as executor) wouldn't get me rating the HIP scheme.

The agent was all too quick to sign me up to the HIP, and of course they have the law on their side now. Their charge was £350 if I paid up front, which I did so that I could move to a different agent at a later date if they didn't perform as expected. They offered a pay-later scheme, but it would have cost £400.

It took weeks for me to obtain a copy of my HIP - I kept sending emails and phones calls to chase it up. I was surprised that there were no details about the fixtures and fittings in the HIP. Well, I should have guessed because no-one asked me anything about the property prior to producing the HIP.

When I got a buyer, I enaged a conveyancer and then got a load of forms to fill in with, yes you guessed it, all the fixtures and fittings. Plus I had to provide details of boundaries and stuff. It seems that the buyer has to pay a great deal more and is required to do more work than at any time in the past. It's a con.

This article makes a similar point: http://www.laystar.co.uk/magazine/ID/32/Home-Information-Pack-Rip-Off.htm

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