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HIPs roll-out causes further upset

23 August 2007

The government’s decision to roll-out compulsory home information packs (HIPs) to three-bedroom properties from 10 September has been received with renewed criticism by property lawyers.

In a statement, the Law Society said that the government should carry out a full review of the first phase of HIPs, which started on 1 August for 4 bedroom properties, before extending it to three bedroom properties.

The Society also accused the government of bowing to pressure from those with a primary financial interest in the HIPs market and of failing to hold formal communication to the other established stakeholders such as RICS, NAEA and the Law Society.

Paul Marsh, Law Society Deputy Vice President said: “We are deeply disappointed that the Government is continuing its cavalier approach to HIPs and the home buying process. It is far too early to be sure how the introduction of HIPs has worked in practice.”

Marsh was concerned in particular that the government has not taken into account the fact that HIPs were introduced in August, a quiet month on the property market, and that the first phase of the scheme only applies to 17 per cent of the total market.

“The Government needs to wait to ensure that the first tranche of HIPs has operated successfully before considering rolling it out to smaller properties, rather than rushing ahead prematurely”, Marsh said. “October would be a more acceptable earliest date for the introduction of HIPs, so that in September a full review of the introduction of HIPs could take place.”

Tracy Thomson, a conveyancer at Morecrofts Solicitors, voiced similar concerns: “August is a quiet month in the property world, and because of this some solicitors and estate agents have yet to come across a property requiring a HIP. How then, can the Government possibly consider implementing the next phase of HIPs to such a large percentage of the total national property stock without first having evaluating the effects of the initial impact?”

But Richard Barnett, a partner at Barnetts Solicitors and a member of the Law Society HIPs Task Force, whose firm is a top five volume conveyancer, said the government could easily overcome the objections raised against the scheme by changing the personal search regime.

Barnett said that the refusal by some lenders and buyers’ solicitors to accept the result of personal searches was not new. Personal searches are cheaper than postal searches but were regarded with suspicion because some local authorities do not allow personal search agent access to all the information on their registers.

“Some information isn’t made available to personal search agents therefore there is a risk on anyone relying on a personal search”, said Barnett. “The way around the problem is for the government to ensure that local authorities make all information available to personal search agents, so that the risk that is perceived in relying on the personal search is eradicated”.

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