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Let’s stop putting the boot into HIPs

It’s all the rage to give Home Information Packs a kicking. I guess it’s to be expected from opposition MPs but lenders and trade bodies have been venting their spleen too. For example, John Gummer, chairman of the Association of Mortgage Intermediaries and the Association of Independent Financial Advisers, condemns them as “a load of rubbish”.

It seems the only person to robustly defend HIPs is Yvette Cooper, the minister for housing and planning, but she has a vested interest.

So what is so evil about HIPs? Is it the cost? What if they were free? Would they be so bad then? They will provide buyers with useful information about the condition of properties and confirm if there are any issues with searches or planning proposals. From a seller’s perspective, this information is worth having. If there are issues, it’s better sellers know in advance rather than finding out just before they move home. Speak to anyone who has recently moved house. It’s last minute issues unearthed by surveyors or conveyancers that cause the greatest angst.

If this information has a value, what is it worth – £50, £100 or £500? The answer is that the market will decide. Asda has already put a stake in the ground by offering free HIPs to anyone who uses its house selling service. No doubt a number of lenders and estate agency groups will offer heavily subsidised HIPs to loyal customers. The government’s estimate of £600 to £700 is therefore theoretical. I suspect the average price of a HIP will be lower.

HIPs may not be perfect but they are a step in the right direction. There may not be enough home inspectors and it would be better if they included lender valuations, but imperfect HIPs are better than none.

Will HIPs cause a boom and bust in the market if speculative sellers are put off at the prospect of having to pay out for a pack? I doubt it. If someone is looking to sell a typical property worth between £150,000 and £250,000 they won’t be deterred from doing so by paying for a HIP.

The cost of a HIP is easy to negate, especially for a clued-up broker. For example, most owners have no idea how much a conveyancer will cost and will happily accept the recommendation of a lender. A broker using a system such as eConveyancer can save several hundred pounds and provide a better service. What’s more, by using mortgage search engines brokers can get free valuation deals, cashbacks and so on. It’s time to stop putting the boot into HIPs.

Alan Dring is sales director at eConveyancer


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