Dishonesty will undermine HIPs

When Hector Sants, chief executive of the Financial Services Authority, recently remarked that principles-based regulation does not work with those who have no principles he caused quite a stir in the broker community.

Advisers didn’t like the implication that they are less than honest and although he also said he believed most market participants were decent, the damage was done.

Being honest, truthful and fair are principles that underpin not only financial regulation but also our legal system. We expect individuals to play fair. If they don’t, they face legal sanctions.

The concept of fair play applies to housing transactions as much as it does to other aspects of our lives. We hope, when we view a house, that the seller is honest in the information they give.

Unfortunately, there’s plenty of evidence that this is not always the case which is why conveyancers spend so much time checking the details of properties under offer.

Which brings me to Home Information Packs. HIPs now require sellers to complete Property Information Questionnaires. I am sure most sellers are honest but some are not, undermining the validity of this approach.

This is the point Sants was trying to make – a few rotten apples can ruin everything.

So lawyers still have to check every property, which means HIPs aren’t much use. There are calls for the packs to be abolished on the grounds that they add cost and but little value. I agree.