New Survey shows withdrawal of HIPs has led to a return of problems with aborted property transactions
Home Information Packs were introduced by the Labour Government in response to a high volume of feedback from the public about concern over property transactions falling through and consequential losses.
The Coalition Government decided in May 2010 to abolish Home Information packs claiming that this would instantly lead to an increase in property activity and put more money back in the hands of the homeowners.
The likes of Kirstie Allsopp, Grant Shapps and Eric Pickles lead what became a very personal and high profile campaign to bring Home Information Packs to an end, and were often photographed unwrapping ‘red tape’ wrapped around houses.
Twenty months on the question is what has this decision achieved – are homeowners any better off and has it led to any change in the very situation that led to the introduction of HIPs?
Recent research suggests it has not. A new survey has shown that over 500,000 house sales fell through at the end of 2011, a jump of 33% from the beginning of the year.
The study also showed that property deals in the second half of 2011 were less likely to succeed than they were to collapse.
This led to homeowners incurring unrecoverable costs, running into thousands in most cases and averaging well over £5,000.
So rather than saving money as we were all told it would, this data shows that what most conveyancers knew, that without the financial commitment shown by those selling in purchasing a HIP, together with buyers not knowing anything about the legal aspects of the property before instructing a solicitor, transactions remain at a higher risk of collapsing than they did at the time Home Information Packs were in place.
The absence of the HIP or a suitable replacement for it ,has also slowed down the sale and purchase process, which in turn has increased scope for sellers and buyers to change their mind and pull out.
HIPs may not have been the ideal answer but at least the reform was one step in the right direction and had at its time of demise begun to make an impact on resolving the problem for which it was designed.
It’s a shame that senseless political football got in the way. Equally it’s a travesty that the main proponents of its withdrawal have just left homeowners far worse off than they have ever been without not even a hint of finding a different solution to what is proving to be a major problem. Grant, Kirstie and Eric we need answers please.