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.
Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk
