HIPs to stay

Despite the initial hopes of home owners, estate agents, mortgage advisers and housing industry experts that this ill-conceived added layer of cost and bureaucracy would be confined to the regulatory scrap heap, HIPs are sadly here to stay.

HIPs were proposed when Labour first came to power. It was John Prescott (remember him) who stated his aim was to speed up the house-buying process and reduce the number of aborted sales. The 10-year gestation period for this particular piece of legislation has descended into a Whitehall farce at times and the initial goals have taken a back seat as the government has sought to dress the whole initiative up as a climate change issue instead (the inclusion of an energy performance certificate for each property sold , similar to that found on the front of a fridge, is designed to encourage us to lag our boilers and replace old double glazing).

The Dept for Communities and Local Government chose to ignore very strongly worded objections from industry bodies and finally rolled out HIPs on properties for sale with 4 or more bedrooms on 1 August 2007. This has led to a significant slowdown in properties of this size coming to market and canny homeowners reclassified spare bedrooms as a study to avoid the need for pack. Unfortunately any scope for creatively looking at the number of bedrooms you have has proved short-lived because HIPs were extended to 3 bedroom properties on 10 September 2007 and from 14 December 2007, 1 & 2 bedroom properties will also require a pack. There's no escape for homeowners in Scotland either as an additional set of HIP legislation is due in 2008.

Most of the information included in a HIP is standard stuff which conveyancers would normally have gathered in the course of finalising a sale but a home condition report is also required at outset and instead of the purchaser paying the costs for all this the seller must have the pack in place before he/she begins to market the property.

The packs include:

• An energy performance certificate - Sale Statement (summarizing terms of sale)
• Evidence of title
• Standard Searches (i.e. local authority enquiries and drainage and water search)

There is a severe nationwide shortage of HIP surveyors to carry out this new process and an entire new industry has sprung up to supply packs to vendors. Charges and services vary hugely with some Estate Agents offering free HIPs.

In reality however, these new breed of Domestic Energy Assessors have to be remunerated somehow and evidence has shown that estate agents are recouping costs via their sales commissions and are seeking to profit from the provision of the packs. Contractors are urged to shop around, 'read the small print' and research various options - we have just launched our own service - before simply taking the estate agent up on his HIP offer.

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