Azara Blog: Some estate agents are allegedly not ordering Hips up front

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Date published: 2008/08/02

The BBC says:

Some estate agents in England and Wales are breaking the law by marketing properties without ordering a Home Information Pack, the BBC has learned.

The Law Society says in some cases, Hips are not available until weeks after the property goes on the market.

It believes sellers are reluctant to pay for the pack when the housing market is slowing.

The packs, which can cost up to £400 and contain information such as deeds and searches, were launched a year ago.

Hips also contain other information useful to any potential buyer such as any recent planning permission or building consent given on the property, and an energy performance certificate.

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

However, in the current troubled housing market, it seems some estate agents are not commissioning Hips when the property goes on the market, something which by law they are supposed to do.

Paul Marsh, president of the Law Society, says the practice is common across England and Wales.

"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.

"You would have expected that the Hip would be available immediately the agreement [to accept an offer] is reached.

"We're not getting a Hip until three to four weeks later, sometimes not until exchange of contracts."
...
Nick Salmon, is a member of the board of the National Association of Estate Agents, and heads the Splinta campaign against Hips.

"I have never yet had a buyer ask to see a Hip on a property," he said.

"They ignore it. It is usually when the solicitor asks to see if there is a pack there that we provide it. The pack is of no interest to buyers and is considered to be a stealth tax by sellers."

But the government says that Hips are already bringing down the price of property searches by improving transparency in the house buying process.

Blaming the apparent reluctance of some sellers to provide Hips on the collapse of the housing market is at best dubious. It's just that nobody really believes in Hips except for organisations with a self-interest in having Hips and also the government (who accepted the advice of the former rather than anyone else). There indeed seems to be little point in Hips other than to make it more expensive to sell a home and perhaps slightly cheaper to buy one.

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