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Miffed by HIPs? Then prepare to be PIQed!

publication date: Apr 5, 2009
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becksOn 8 December 2008, the Minister for Housing, Margaret Beckett, announced proposals to improve and simplify the consumer content of the Home Information Pack (HIP). The result was the PIQ – The Property Information Questionnaire.

Mrs Beckett says that the PIQ, “has been designed to be easy for sellers to complete without professional help and will provide buyers with basic, useful information about a property that will help to inform their decision to view a property or make an offer.”

The eight-page PIQ; mandatory from April 6 2009, has to be completed for inclusion in the HIP. The purpose of the PIQ is to help to inform prospective buyers’ decisions about whether to view, or make an offer on a particular property.

As for HIPs, on April 6 the current first day market exemption comes to an end, meaning that the basic HIP must, by law, be available before the seller can begin marketing their property. Local searches can still be included in the HIP up to 28 days after the first day of marketing. In addition, the use of insurance in personal searches to cover missing data will end, a measure designed to remove certain ‘cowboys’ who provide insurances rather than full searches (the illegal HIP). Every HIP must now contain all the required search information (see below) and be paid for, or arrangements for payment made before the property is marketed. The following documents are a minimum requirement before marketing can begin:

  • Index
  • Property Information Questionnaire
  • Energy Performance Certificate or Predicted Energy Assessment
  • Sustainability Certificate (new homes only)
  • Sale Statement
  • Land Registry Documents.

The Government says that these changes are being introduced to Home Information Packs so “that better information is available at the beginning of the home buying and selling process, and before buyers incur costs. Informed choice by buyers at the start can help reduce delays later on and wasted time for sellers.”

PIQ Questions include:

The property’s address, when it was purchased, whether it is listed, freehold, leasehold, its council tax band, parking arrangements, storm or fire damage, insurance claims, flood risk, damp treatments and guarantees, utilities, central heating servicing, structural changes and permissions and rights of access.

For leasehold properties there are even more questions, on service charges, ground rents and insurances, lease covenants, ongoing works and parking restrictions.

A sample PIQ is downloadable at: http:// housing/propertyinformation questionnaire.

Meanwhile criticisms and calls for the suspension of HIPs continue...

In the House of Commons Communities and Local Government Committee’s report, “Communities and Local Government’s Departmental Annual Report 2008”, (published in February), the Committee was, in Section 3, Home Information Packs, critical of CLG management of HIPs:

“Home Information Packs (HIPs), introduced to improve and speed up the process of buying and selling a house, came fully into force in December 2007. By March 2008 over 452,000 had been produced. The average cost of a HIP ranges from £300 to £350; the Department reports that HIPs are reducing the cost of local searches by an average of £30.

The Permanent Secretary told us on 13 October that the total number produced was now more than 800,000. The National Audit Office cites Departmental research that found that 72 per cent of sellers were satisfied with the HIP; it also found that 40 per cent of buyers saw the HIP for the property they were purchasing, with half of those seeing the HIP after making an offer, but that 77 per cent of buyers said that the HIP hadn’t affected their decision to buy.

Margaret Beckett acknowledged that HIPs had their shortcomings: “I fully accept that they [HIPs] are perhaps not the perfect vehicle one might wish to see.” Responding to a suggestion that they were adding to the problems in the housing market, however, she went on to say that, while they may provide an efficient way of gathering information and cut short search time, they are “an absolute drop in the ocean; they don’t affect the housing market.”

The Annual Report—which this year, unlike last, at least acknowledges some of the difficulties the policy has encountered—further admits that “it is clear that some consumers are not seeing the HIP and therefore not getting their full benefit. We will continue to work with stakeholders to enhance and further improve the HIP so consumers get the information they want at the right time.”

At our second oral evidence session, we put it to the Minister that the information contained in HIPs may well become out of date because of the current stagnant housing market. She accepted that this was a matter of concern and assured us that the issue was being looked at with the relevant authorities.”

In the report’s conclusions and recommendations it says:

“In our last Report, we said that HIPs were an example of CLG’s inability to build the relationships it needs if it is to succeed in taking partners with it across the whole range of policy. This point stands again, one year on. The results of the mishandling of the introduction of the HIPs policy are now evident, in that CLG is still struggling to perfect the scheme at a time when the housing market needs more robust and effective initiatives. We hope that the Department’s acknowledgement in its Annual Report that the policy is not yet delivering its full benefit reflects a renewed effort on its part to work effectively with its partners to ensure that it does so, and welcome the indications from the Department that that is the case.”

Responses to the report included:

spelCaroline Spelman, Conservative Shadow Secretary of State for Communities and Local Government:

Caroline echoed the findings of a Select Committee report that condemns the failure of Labour’s flagship programmes across local government and housing, stressing that the committee report is a “vote of no confidence” in Labour and “a savaging by the Labour Party’s own backbenchers”:
“There is a litany of failure across the Government’s flagship programmes from Home Information Packs, to eco-towns to its own internal management.”

tethLiberal Democrat Shadow Housing Minister, Sarah Teather:

“HIPs have been an implementation disaster from the very beginning. We’re now in a situation where the Government is holding back the recovery of housing market by creating extra red tape and expense for homeowners.”

Gillian Charlesworth, RICS Director of External Affairs said:

“RICS agrees with Committee’s conclusion that states that the housing market needs more robust and effective initiatives on home buying and selling. However, as we understand it, CLG is doing its best to achieve this in the face of opposition from other parts of government.
“It is BERR and OFT that continue to stall on much needed reform of the home buying and selling process by carrying out further studies and reports on regulation and transactions, issues that have already been thoroughly investigated by a number of experts, including RICS.”
“We would not need HIPs if we had a properly regulated estate agency market and a simple requirement for all those offering property services to give consumers decent standards of service and the information they need to buy or sell their property.
“Despite improvements in effectiveness, delivery is still patchy as shown by the Department of Communities and Local Government’s problems in implementing key policies such as eco-towns, the Decent Homes programme and Home Information Packs.”

kingPeter Bolton King, Chief Executive of the NAEA, said:

“Once again a fair and rational examination of Home Information Packs has concluded that the system as it stands is simply not working. Firstly the cost is punishing sellers in the pocket at a time when they really need all the help that they can. More galling, they are spending this money in the knowledge that 77 per cent of buyers admit that they paid no attention to the pack whatsoever.
“Margaret Beckett herself admitted that HIPs are not working – but now she seems to have buried her head in the sand along with the rest of her department. HIPs are confusing to customers and act as a dampener on a housing market which is essential to Britain’s economic recovery.”

Note to agents:

The Partnership; a Home Information Pack specialist, reports that:

Trading Standards Inspection With the scrapping of the first day marketing exemption, questions have been raised about how effectively this new system will be policed. There has been a certain amount of scepticism about the ability of trading standards to cope with inspections of agents. However, evidence is emerging that trading standards officers are actively inspecting agents, with reports of on-the-spot visits in the London Borough of Camden. Agents were asked to demonstrate the process they use to order HIPs, as well as produce copies of a HIP on an existing property and show the Energy Performance Certificate for the rental properties that they had on their books.