On the 28th July 2007 I got married. On the 1st August Home Information Packs (HIPs) were, after a short and unexpected last-minute delay, introduced.
As I had set up, at no small cost, a HIP production business with legal office/stationery supplier OyezStraker and as I had to be in our HIP production centre in London on day one, I had to cancel my planned honeymoon. Not a great way to begin a marriage!
With the current-day introduction of the new Material Information requirements now upon us, I have a strong sense of déjà vu and of 15 years having been frittered away.
Property Industry Eye has kindly given me the opportunity to explain why I feel that. Ironically, Nick Salmon, (my HIPs nemesis back in the day), is the publisher of EYE!
I’ll be honest, as a conveyancer, I saw HIPs as an opportunity for conveyancers to become the first port of call for property sellers. You needed a HIP before marketing and who better to produce one than a conveyancer. Conveyancers could then recommend an estate agent and request a referral fee!!
I knew that the HIP legislation was flawed and that the documents required to produce a HIP would not help the home buying and selling process in any meaningful way. Nevertheless, Oyez and I set up a HIP production business.
My aim was to produce a basic HIP as quickly and as cheaply as possible in order not to delay marketing. I called it a QCP (mark 1), a Quick Crap Pack!
However, my cunning plan was to get the seller to instruct a conveyancer asap (i.e., before a buyer had been found) so that they could review the HIP and add the obvious missing legal documents, Transfer, Planning Permissions, and Guarantees etc. turning the QCP mark 1 into a better QCP (mark 2), in fact a Quality Conveyancing Pack, as our production system allowed conveyancers to scan and upload additional documents.
It worked; the packs we produced were as ‘exchange ready’ as was possible to achieve.
Did they speed up transactions? Probably not, because we did not produce all of the HIPs in a chain, and many of them were a QCP mark 1.
I get most of the objections to HIPs.
No one wanted them, no one read them, they didn’t contain a condition report etc.
But, and this is my main gripe, they should not have been terminated permanently. There should have been a 6-month suspension and a thorough investigation of what was working, what wasn’t and why, and what could be done to improve matters.
Fast forward 15 years and we have the new Material Information requirements and, whilst they are not HIPs or mandatory in the same way as HIPs, they look like becoming some kind of Property Transaction Pack.
I would really like to see agents and conveyancers now working together to make sure that whatever is produced in the near future is something that helps speed up the homebuying and selling process in some way.
Am I bitter? Not really. After a few years struggling, I managed to turn my HIPs failure into the Bold Legal Group which, thankfully, goes from strength to strength.
But here I am again, away for a few days celebrating my wedding anniversary with my wife of 15 years, writing about HIPs. She says she has popped out the shops.
I will let you know if she ever returns.
Rob Hailstone is CEO of Bold Legal Group
Comments (2)
Interesting Rob, as you stsate, you would have been the first port of call from a vendor. We’ve just had a HMRC AML compliance check, and one of the questions I asked the officer, was why are estate agents being made to carry out Money Laundering checks when we dont see any money whatsoever? He replied “its because you are the first point of contact” So I wonder if you would have carry out the compliance checks if you are the first point of contact? We will never know!!
I was a positive supporter of HIPS (needed refinement but the right way forward) and certainly of the benefits of “upfront information”
Where I differ from Rob is that I can never see conveyancers being the first port of call in a property transaction (unless they start spending £s on the portals and doing free market appraisals and free viewings etc). Agents have always been the catalyst for a transaction and I don’t see that changing.
The lost financial opportunity of HIPS for agents and conveyancers was huge but the real cost has been the slowing down of the market from around 13 weeks per transaction to c20!
Referral fees are a red herring. If agents and conveyancers work together properly then an agent is worth a referral fee as they are actually reducing conveyancers costs and taking on the marketing and client acquisition and leaving conveyancers to get on with Conveyancing. I know this isn’t always the case but it is down to agreeing the best commercial way forward.
Conveyancers for their part could align their fees with agents (no move no fee?) or at least be prepared to open a file when a property comes to market and not wait until a sale is agreed.