Q. I have noticed a number of articles in the press recently advising that the Governments plans to introduce home information packs in the sale of all properties will have a detrimental affect on the housing market. Is this correct?
A. From June 2007 the Government intends to force all home sellers to introduce a home information pack (HIP). This will contain a variety of legal documents such a copy of Title Deeds, a survey called a home condition report, an energy efficiency report plus other documents. The average cost of a pack is estimated at £635.00 to £1,000.00. The National Association of Estate Agents and many other organisations (including a growing number of solicitors) think this could ruin the property market. It will fail significantly to improve the home buying process and the additional costs will outweigh any possible benefits. It is estimated that 30% of sellers will not come to the market because of the cost of arranging the pack. This reduction of supply will increase the intense separate pressure on prices and reduce the choice of the properties for buyers.
Additionally, it is felt that gazumping, chains and the fact that sales fall through because people will simply change their minds will not be reduced by these packs. The HIP will have no shelf life as the searches included in the pack will quickly be out of date. No sensible buyer is going to rely on a survey report that is more than three months old in any event. Also, Mortgage Lenders have indicated at this stage that they will not accept the home condition report and so therefore will still insist upon obtaining a mortgage valuation report which means that the process will not be speeded up at all.
A complaint is being lodged by Kirsty Allsop and Phil Spencer of the television programme, "Location, Location, Location" which asserts that the only parties who will benefit from these packs are the companies that will make money out of providing them. They also point out that the Government will obtain extra revenue via VAT upon the packs.
No doubt the position will become clear over the coming months.
