Home Information Packs are due to be introduced across the country in June next year. Compulsory information packs which are supposed to be impartially drawn up by qualified home inspectors, they are designed to speed up the buying process. They also transfer the burden of the cost of a survey from buyer to seller. But what effect are they going to have on the market, and what is it going to mean for those who are going to be buying and selling?
A little bit of knowledge can be a dangerous thing, and when it comes to Home Information Packs, the ODPM’s policy of reticence has many who are involved with the property market to question what is going to happen when they become compulsory.
Bernard Clarke from the Council of Mortgage Lenders certainly has concerns about the lack of information prior to the ever approaching deadline: ‘When the date for go live was announced in November, this raised more questions than anything else. The detail needs to be clarified so that everybody who needs to do work to prepare can do so,’ he says.
There are issues around data management for mortgage lenders, and how the data is handled is crucial. If all the information contained within a Home Condition report ends up in an enormous database, who gets to look at it, and will they have to pay? The implications are interesting.
There are also issues for estate agents about HIPs in terms of how they will affect the market. Mr Clarke mentions that it seems mad that the Government has chosen to introduce them in June 2007, when the market will be most busy, and confusion is likely to reign, slowing down rather than speeding up sales.
Estate Agents also have worries that the market could be completely skewed by the new system. ‘There is concern that the June date for compulsory HIPs will mean lots of people try to sell their houses earlier that year to avoid the cost of the Pack, and what we will see is a glut of property in the early months of the year, which will drive down prices, and then a complete lack of property after June,’ warns John Vaughn at Savills.
But a spokesperson for the Office of the Deputy Prime Minister disagreed with this, arguing that all their research points to the need for packs to be introduced at a time when the market is most likely to be healthy, rather than in the winter when it is quiet and more likely to be upset by changes to the law.
In terms of the market, the National Association of Estate Agents (NAEA) has also warned variously of both gazumping becoming more common as more detailed information is available on properties, making it easier for people to make a sudden last minute offer.
Gazundering could also become more widespread, Chief Executive of the NAEA Peter Bolton King has warned.
But the one thing everybody must agree on is that the property market is volatile, and we must just wait and see what will be. Unpredictable, the market is subject to many external forces and in these terms, June 2007 may as well be a decade away.
One concern raised by some commentators has been to do with the authors of these reports: the home inspectors. The ODPM says 7,500 new Home Inspectors need to be found to cover all the home inspections which will need to take place to make HIPs up. So far it appears there has been a lack of people willing to retrain, which can take just a year, and therefore packs will take longer to put together than anticipated, which could again affect the market.
Home Inspectors will also need to receive particular training to deal with top of the range properties, country houses and listed buildings, which have very particular quirks.
There is also the issue of the trial run, which has been mooted, but the Government has not yet made clear when it will begin. Designed to iron out any problems with the packs before they become compulsory, the dry run as yet has no ‘go live’ date.
The ODPM spokesperson told Countrylife.co.uk that the dry run can be expected sometime in the summer, on a voluntary basis, but experiences of an albeit different system north of the border prove that when faced with the choice of selling their home normally, and doing the same using a Home Information Pack, people tend to go for the devil they know.
The ODPM promises there will be an announcement from the Minister who is overseeing this entire changeover, Yvette Cooper, in coming weeks, as to some of these questions, but they are determined not to ‘drip feed’ information, so who knows how much we will learn.
For now, those in the world of property sales are doing what they can to keep up. There are harbringers of doom, and then there are those who are more complacent about the effect HIPs will have. But everybody is agreed that there is no kind of crystal ball to help us see what effect the packs will have.
For now, we sit and wait.