With the introduction of the basic HIP now less than a month from implementation Paul Holmes, Operations Director of Firstrung, is certain that by diluting the pack to the status of an energy inspection only a huge opportunity has been missed...
"Home Information Packs, which are due to become a requirement when selling a home from 1st June 2007, would have been of tremendous benefit to first time buyers. The Packs (HIPs) would have been compiled when a property was placed on the market and would have contained not only the normal legal documents relating to the property and its sale, but also a type of survey, known as a Home Condition Report, which would have included the Energy Performance Certificate.
The seller, the buyer and the mortgage lender would have been able to, (under the law), rely upon the HIP documents being authentic and the fact that the Home Condition Report would been prepared by a properly qualified, licensed and insured Home Inspector. Being liable to those parties for the contents of the Report would have had huge benefits in streamlining what is still perceived by first time buyers to be quite a complex and daunting process."
Holmes believes that first time buyers, more than any other buyer group, had most to gain from the implementation of the full home condition report...
"For young people entering the homes market, the ability to save up for a deposit, or enough cash to justify a mortgage is hard enough. On top of this, they currently have to pay out all the legal costs involved in ensuring the title is good, including the costs of the various searches which are either required or highly advisable. They also usually have to pay a mortgage application fee, which is often a substantial sum due largely to the need for a physical inspection of the property by a professionally qualified valuer. Consequently many first time buyers have to spend several hundred pounds in order to find out whether they can, or indeed should, buy the property.
"The uncertainty and lack of information which often goes hand in glove with this process can be confusing and worrying and first time buyers are generally people who have little experience of the process, this often appears daunting. First time buyers are more often than not purchasing at the less expensive end of the market and consequently the property may be in less than ideal condition.
"There may be aspects of it which have been dealt with unsatisfactorily or neglected. Not only will the first time buyer be more likely to come across such problems (though they may not discover them until it is too late), they are least experienced in how to recognise and handle them. If anyone could have benefited from a full condition report, it was the first time buyer. Yet most, because of financial constraints or a misguided belief that the mortgage valuation inspection is a survey, still have no type of survey at all.
"The full Home Information Pack would not have solved all the problems of buying a home, but it would have removed or minimised a lot of them and in the case of first time buyers, would have had very real immediate benefit"
Holmes believes there were no disadvantages with the full HIP for the first time buyer:
"There were quite frankly no disadvantages in the original Home Information Pack for the first time buyer. The only factor for consideration was that when they came to sell the property they would have to provide the information for a prospective buyer in the same way as they had received it - though in coming years the process would have inevitably become more streamlined and simple with probable reductions in costs.
Furthermore and of critical importance, as a second time buyer, they would have also derived the benefit of a HIP on the property they were moving to"
