If Home Information Packs (HIPs) had not been scrapped we would not be in the confusing position we are now with the introduction of the new Material Information Guidance (MIG). The HIP, over the last decade or so, would have evolved into a pack that could easily have contained all of the new required Material Information (MI). Are we now being offered another bite of the cherry, and should we all be grasping this bull by the horns?
If I remember rightly, the basic HIP contained; Office Copies and a File Plan, a pretty useless Property Information Questionnaire and a Local and a Water and Drainage Search. Admittedly nothing of much use to a potential buyer or even a buyer’s conveyancer. However, some HIP providing companies (including mine) were, by working closely with the seller’s conveyancer, adding additional documents whilst the property was still being marketed. For example, copies of documents containing, Restrictions, Easements, Rights, and Covenants.
In addition we were adding Guarantees, Planning Permissions, and Building Regulation Approvals. In fact anything and everything that would help the transaction proceed quickly and easily. Most of our HIPs, as a result, became as exchange ready as was possible. It therefore would not have been beyond the wit of man (or woman) to have easily and quickly added the other information now required by the MIG.
Due to a healthy amount of competition between HIP suppliers and others, the price of a HIP was not at an amount high enough to have deterred most property sellers from marketing their property. And, there was a very good deferred cost offering available that was being used by many (wouldn’t that be helpful now?). HIP production was also very rapid, so there was hardly any delay from taking a property on, to being able to market it. Although HIP production was fast back then, given the massive advancement of technology over the years, they would be being produced almost instantaneously now.
I distinctly remember a meeting of the Association of HIP providers and Grant Shapps, where the former made it clear that its members would do all in their power to refine the poor product that The Housing Act 2004 stipulated was required. Shapps was having none if it however, HIPs were going whether we liked it or not. He is now in charge of the defence of our country and in these troubled times, I sincerely hope he does a better job.
We now have a situation where MI is required, but is not yet being supplied by many agents, probably because, although there are penalties, Trading Standards is not yet willing, or able, or both to implement/enforce them. HIPs however were brought in by statute and it would have been a serious offence for a property to have been marketed without one. There was virtually 100% HIP compliance.
Compliance with the MIG will eventually happen, because those requirements are not going to go away, but it will take time and will for some, be painful. All this confusion and uncertainty now would have been unnecessary, if only those in power had had the gumption to suspend HIPs for a while and work out (with the help of those involved) what additional information and documentation was required in order to make them beneficial for all parties.
HIPs won’t return, but we don’t want to make the same mistakes again and be in this muddled situation in another decade’s time. Whatever MI evolves into, it must benefit all parties, seller, buyer, agent, conveyancer and surveyor. In my opinion, the only way that will happen is if all of those parties work together over the coming weeks and months.
Rob Hailstone is founder of the Bold Group, a network of conveyancers
Truckload of common sense right there.
Your last sentence would appear to be where the challenge will truly be found. Unfortunately.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Surely you mean a removal van load Matt:)
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The only challenge is the people who all of a sudden know it all about everything and want all the rich pickings for themselves. Polite, respectful consideration between stakeholders is key to ensuring change happens. Because there is a change of dynamic and a legislated change of when clients engage with stakeholders, there is a real farmyard scrap over cash, ego, and opportunity.
I’ve got most of this figured out now, and have been having nothing but positive conversations with each of the individual stakeholders in the process of getting the old owners out of a house and new ones moved in. Last week, I stood in front of a group of agents to explain the change and how the dynamic of their industry will be changed. The response was very positive after a concern and sceptical start. It very much looks as if a new industry standard is possible, and it will only be greedy opportunism that stands in the way.
As no one wants to appear greedy and self-serving, and with my ability to call it out, those who choose to stand in the way of progress can expect some professional embarrassment.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Well done Robert for bravely mentioning “greedy opportunism”.
Before we all start pointing fingers at our competitors I rather agreed with the comment from Charlie Lamdin in his Christopher Watkin interview (on You Tube) identifying the source of greedy opportunism as, not being with branch or regional managers, but with those higher up in corporate agency laying down rules and targets for instructions, referral fees and seemingly little else.
They also seem to have little regard for staff churn or even mental health issues, and even less for consumers, flattered by high valuations and often masking a locked-in package of second rate conveyancing, financial services etc. determined not by quality and service, but by whichever of those chimps has offered the highest referral fees.
Yes, as independents, we can warn potential clients not to get sucked in by the hype, but it is an uneven playing field. The race to the bottom (in fee levels and service) seems tragically set to continue, driving the best away from agency, and leaving our client base with poorer choices.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I haven’t mentioned “greedy opportunism” and certainly haven’t given any indication the issue is with any agent- most agents are oblivious to their CPR- MI obligations
Please don’t try to align me or my post with anything put out by Mr. Wright/Lamdin or anyone else. I’m sat in the centre of change trying to deal respectfully with change management and although I will call out the people and organisations who are seeking to serve themselves before others I definitely will not be taking the side of anyone other than professional agents to make sure, they as the front line of change, are not railroaded into services and solution that suits suppliers ahead of agents as customers or which do not actually solve the problems MI regs are trying to fix
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Perhaps we’re can have a comment from SPLINTA on this? I believe there is someone associated with Eye who had very strong views on HIPS.
Should SPLINTA start campaigning against material information or is it different this time?
Just interested to hear.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I too was at one of those Grant Schapps meetings, and many other meetings with previous housing ministers, and was often staggered by their lack of knowledge of the subject. I always felt that they just paid lip service to all the efforts that we were all putting into our industry to try and make it better. Very frustrating!
It’s been ‘consult and ignore’ by the government ever since I can remember and it’s difficult to know what might change if left to them.
It will only be the industry and related parties, that gets this sorted..
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
As someone who came into this industry on the back of HIPS I was, and still am, supportive of such an initiative for upfront information. But I also believe firmly in the democratic process. When the Conservatives stood for election in 2010 they did so on a ticket of abolishing HIPS. Which is exactly what Grant Shapps did……for right or for wrong.
Looking at the situation today we seem to have the unelected and unaccountable Trading Standards mandating significant changes to our industry without any proper consultation or examination. That doesn’t sit comfortably with me.
Accepting that information collated prior to marketing a property is a good thing then let’s have a proper industry consultation, supported by Government and inclusion from all interested parties.
When it comes to mandation then that, in my opinion, should be a political decision that consumers can accept or reject at the ballot box.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Did you also complain about the Property Misdescriptions Act’91, ’93, 2013?
I would argue that anything to help buyers make an informed decision and save time and money in a transaction is a positive step. Surely such a move should not require consultation or examination from an industry that would otherwise (if voting against it) be happy to continue to mislead or misrepresent homes on the market.
Trading Standards should not need to consult anyone trading, to impose changes to safeguard consumers. I feel that this is long overdue. To say that there was no consultation at all would be incorrect though. Trading Standards have been working closely with the Home Buying and Selling Group (HBSG) which contains many industrywide big hitters and influencers.
I do hope that everyone gets to grips with the suggestions, delivers a collaborative and positive industrywide move to embrace the change and reap the rewards of fewer fall-throughs and faster transactions. Let’s hope that the rogue traders out there start to stand out like a sore thumb.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I think PMA is, as the title suggests, an Act of Parliament…so it has been through the democratic process, hasn’t it?
As a participant in the Home Buying & Selling group I can confirm that the RPSA were not consulted by Trading Standards during this process.
As I said “Accepting that information collated prior to marketing a property is a good thing then let’s have a proper industry consultation, supported by Government and inclusion from all interested parties.”
So, I absolutely agree that information is a good thing…just done in the right way.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
My point was, does anyone really need to endure endless industry meetings and garner the approval of everyone to improve the process? I don’t believe so.
I fail to see why the industry comes up with negative comments about ‘how’ progress was made, rather than simply embracing the fact that progress has been mapped out.
Why do people feel the need to have improvements mandated by government…it’s crazy. If things are better for the industry and for consumers, surely that’s job done.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The legal requirement for MI is in Consumer Protection from Unfair Trading Regulations 2008
All National Trading Standards did was to set out guidance as to what MI actually is.
I don’t believe this is as difficult a situation as some claim. Most if not all of the MI is already collated and provided but in a piecemeal fashion. All MI does is bring it all together before the property is listed. This will improve the process immeasurably.
The best thing to do would be to encourage the seller to instruct a Solicitor before listing the property to get it sale ready. Think “auction pack” plus early legal advice and resolution of legal issues.
If the various legal profession Regulators stamped out unnecessary Enquiries and the obsession with Indemnity Insurance then we’ve got it cracked. No need for lots of tech, just doing things properly before listing rather than listing and hope for the best.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
YES, YES, YES and MORE YES!!!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Happy to oblige with the request from GreenBay
SPLINTA (Sellers’ Pack Law Is Not the Answer) was a property industry lobbying/protest group founded by me and Penny Court (then of Beauchamp Estates) to try and persuade the then government to amend its proposals for the packs (which later became Home Information Packs). At its height we had over 2,000 estate agency firms supporting our efforts and many industry bodies, including the NAEA (now Propertymark).
SPLINTA never said there was anything wrong with having relevant information provided to a purchaser in a timely manner. What we took issue with was the misleading government (and some pack providers’) propaganda surrounding the packs and the likely disruption to the market that would be caused if pack was to be introduced in the form proposed.
These were just a few of the many main points of contention:
In the late 1990s the government produced a document ‘Key Research into Home Buying & Selling’ which contained statistics which they used to promote the case for packs. The stats themselves were highly questionable as a very small number of transactions had been analysed – and then extrapolated out to the whole market.
A main plank of that government promotion was that packs would reduce fall-throughs, which were said to occur in 28% of transactions. However, analysis of the data showed that the packs would actually be likely to only influence fall-throughs in a very small minority of cases.
A ‘survey/condition report’ was to be included in the packs. However lenders were not prepared to rely on them for lending purposes. So a separate mortgage valuation would still be required – causing more delay and leaving uncertainty in place.
Similarly, the pack would require management information for leaseholds. There was no mechanism to compel managing agents to respond quickly to enquiries and no cap on what they might charge for the information.
Local authority searches were to be included – yet such searches were taking weeks to produce.
An Energy Performance Certificate (EPC) would be required – and that would need a legion of new inspectors who had not yet been trained in sufficient numbers.
Given that the government was dictating that a property could not commence being marketed until the pack was complete, SPLINTA argued that many owners would face unacceptable delays in getting on the market.
We further argued that since it was (then) taking, on average around, three months for a first offer to be received on a property, it would make sense to allow marketing to commence immediately and assemble the pack over a period of time.
For a number of years, Government (in the shape of the civil servants tasked with introducing the pack and surrounding legislation) would brook no arguments against the pack and would not accept that they were taking the industry and the market down the wrong road.
In the face of that intransigence SPLINTA adopted a position of outright opposition to the pack. If we could not get the government to adopt sensible amendments to their plans then we would have to work to kill off the pack in its entirety.
And, after years of effort, that is what we succeeded in doing.
In respect of the current Material Information requirements, there is, in terms of the surrounding guidance/regs/rules, no comparison with the packs. And because SPLINTA always said that relevant information being provided in a timely manner made sense, I am sure we would not be in opposition to what is happening today.
p.s. If anyone has trouble sleeping, they might like to read the written submission that SPLINTA made in 2003 to the ‘Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions’. It contains our detailed criticisms and our proposals that would have made the packs more beneficial and far less contentious.
https://publications.parliament.uk/pa/cm200203/cmselect/cmodpm/751-ii/751w23.htm
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Hi Nick, thanks for the detailed reply.
Where I am coming from, is that the industry has got used to making HIPS work but my memory and impression was that SPLINTA was still very much campaigning against them.
So the question is, are we in a better or worse position now, than if HIPS had remained?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I don’t think the industry has [sic], or rather, had, got used to making HIPs work. They were not around for long enough. SPLINTA ceased campaigning when the Conservatives kept to their pre-election promise and abolished them. As for whether we are in a better or worse position than if they had stayed…that depends on what part of the transaction process you might look at. HIPs might (big might) have decreased search times and might (huge might) have got managing agents to be quicker in supplying info. Taken as a whole, I very much doubt if HIPS would have decreased overall transaction periods by very much and I certainly do not think they would have done very much to reduce the ‘normal’ proportion of fall-throughs.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Email from one of my members:
“Re HIPs and MI, I was at that same meeting with Shapps and remember him listening (much like the “nodding dog”) and accepting the undeniable benefit of HIPs to the consumer and market, but then rolling out the party line that, regardless of how wonderful he thought it may be, the party had promised to scrap this Labour-generated offering, so his hands were tied if the Conservatives got in at the subsequent election. It was a political sacrifice that pleased those that couldn’t get their heads ’round it or simply saw it as a challenge to their ranking in the industry pecking order.
Some real facts – I managed HIP production in a very large law firm that saw us produce almost 3,000 a month and was involved during the early roll-out. One of our first ever HIPs caused a seller some consternation as (and you may recall this) the original intention was to include a Home Condition Report or HCR (survey to the rest of us!) and his wasn’t that good – damp in a basement and other issues. However, the estate agent was able to appropriately value “warts and all” and the property sold very swiftly at the asking price. No months of prevarication between buyer and seller about the state and condition (it was already known upfront) and no surprises. Even the estate agent (begrudgingly) accepted that it had made his job easier and avoided the unnecessary renegotiations and fall-throughs that would generally have been expected. The HCR was ditched during that early test phase, again due to lobbying from the “nervous” stakeholders seeing a potential loss of positioning in the process.
Second fact – one of the country’s biggest estate agents adopted the HIP with equal measures of enthusiasm and doubt, but the latter was dispelled very swiftly when they put out empirical figures that evidenced a clear reduction in time from offer to exchange, where a HIP had been produced – this was over a very large sample.
I was – as I know you were – a supporter of HIPs and saw it as a stepping stone in the evolution of the processes, rather than the panacea to all ills. As we’re now seeing, the idea of entering into a negotiation with eyes open and as much information available up front (what an unusual concept?!) is attaining some traction, but sadly it’s looking like we’re back to the position we were in pre-millennium with the bear-pit of stakeholders jostling/clawing for position.
Embrace the change and work with it I say…but the nodding dogs need to step up and stop the politics.”
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Very good article Rob.
Our detailed research across Connells Group in 2009 proved that HIPs were having a positive impact on transaction times.
I was invited to join a Conservative working group, instigated by Shapps and led by Owen Inskip – I pleaded with them firmly not to throw the baby out with the bath water but to no avail – Eric Pickles administered the final nail in the coffin a few days after the election. I have had little respect for politicians since then..
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register