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AHIPP Appeals for Change of Perspective

publication date: Sep 20, 2009
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Angry peopleThe last month has been notable for continuing negativity towards HIPs, particularly from Grant Shapps. He says ‘scrap HIPs’ at every opportunity and yet he likes EPCs… but wants to move them to the end of the process where they will have no impact.

AHIPP would like to move the conversation forward. Scrapping things is fine provided what it leaves behind is an improvement. In this case however it will take us back to the old unsatisfactory process that every party to home buying and selling agrees is broken and causes consumers unnecessary cost and stress. It is worth restating that nearly one in three transactions failed in the market before HIPs were introduced and consumers pay out £1 million pounds a day in abortive costs as a result. Transactions on average took 82 days from acceptance of offer to exchange of contracts and caused much stress to the consumers involved.

There is strong evidence (particularly from Connells Estate Agents) that HIPs have reduced the time between offer and exchange and are saving costs and stress as a result. Much of this is because the pack includes legal documents that buyers’ conveyancers use to progress matters. This is not rocket science – much of the time taken to move from offer to exchange was taken up in obtaining information that is now available up front in the HIP. Whilst some ‘luddite’ lawyers will refuse to use documents in the pack (and involve their clients in additional and unnecessary costs as a result) it is clear that the vast majority of specialist conveyancers rely on the documents in a HIP.

Mike OckendenAs a result of this a great many pack providers have taken the initiative to put even more legal documentation in the pack including a draft contract, additional information from the vendor and extra title documents and searches. The results have been remarkable as times to exchange have routinely been reduced to less than 30 days. Not only does this bring certainty to buyer and seller, it reduces failure rates and saves consumers money and stress. For estate agents it means that commissions are assured and received much more quickly – surely a strong motivation to use these ‘exchange ready’ products.

It is AHIPP’s belief that this practical reality will take hold as the weeks and months go by and the emotional engagement with scrapping HIPs will quickly wane. As estate agents start to recommend that vendors use these products, which cost little more than a ‘standard’ HIP, the benefits will become self evident and the word will spread.

AHIPPThe challenge then is to ensure that Grant Shapps is convinced of the benefits of ‘exchange ready’ products so that conversation moves to how the existing HIP is replaced and negative talk turns to positive and constructive dialogue.

AHIPP would be quite prepared to view these new ‘legal packs’ as a replacement for the HIP which as a name has been tainted by their desperately poor introduction by this Government. What is important is that we do not move backwards for the sake of home buyers and sellers and cast them back to the old broken process.


THE NEW FEDERATION OF PROPERTY INFORMATION PROVIDERS (FPIP)

I would like to close by explaining the rationale of creating FPIP as an umbrella organisation for trade associations representing industries providing information vital to the home buying and selling process. FPIP will enable these interests to work more closely together to deliver benefits to consumers as well as optimising their voice with stakeholders and in the public domain. It is also part of reducing the industry fragmentation in the home buying and selling process.

This is a positive step forward and is in keeping with the theme of this month’s contribution. Let’s stop all the negativity and start to engage in constructive dialogue to architect a better future for home buyers and sellers and for all of us that serve them.