HIPs reduce failed transactions and benefit solicitors, provider claims
Home Information Packs (HIPs) have reduced the number of failed conveyancing transactions, figures have suggested.
Conveyancer and HIP provider myhomemove said the packs had caused the number of failed property transactions it was involved in to dip to 9% since the full introduction of HIPs last April. The figure is significantly lower than the 23% average failure rate published by the government in 2007, before the introduction of HIPs.
The data for more than 10,000 sales where myhomemove acted for buyers also showed HIPs had speeded up transactions by about six days, with the average time taken to complete now 50 calendar days.
Mark Montgomery, commercial director of myhomemove, said: ‘Obviously the unusual market over the last nine months has also played it’s part, but it is hard to escape the conclusion that overall HIPs have played a major part in reduced transaction times and a reduction in failure rates.’
‘Paying for a HIP before a property can be marketed undoubtedly excludes some of those sellers who prior to HIPs would simply have been “testing the water”, and this alone will have contributed significantly to the reduction in transaction failure rates,’ he added.
Mike Ockenden, director of the Association of HIP Providers, said: ‘Failed transactions cause serious problems for large numbers of consumers every year, yet these statistics demonstrate how the information provided by HIPs leads to better informed, smoother transactions.’
He added: ‘Forward-looking conveyancers have used HIPs to their advantage, especially those who have started marketing exchange-ready packs. It’s a positive way forward for solicitors to place themselves at the heart of the conveyancing process.’
David Duckworth, partner and head of residential conveyancing at Optima Legal, said: ‘As providers of a substantial number of HIPs, they have been a good thing for us.’
But he added: ‘I suspect that smaller conveyancing solicitors who largely manufacture HIPs only for their own selling clients do not find them meaningful in terms of contribution to profit.’
However, Richard Barnett, chairman of the Law Society’s conveyancing and land law committee, said: ‘HIPs have provided no real benefit to solicitors in general as there are so few solicitors producing a significant number of them.’
Commenting on myhomemove’s figures, he said HIPs were unlikely to have played a significant part in reducing the failure rate. Instead, he put the drop down to the unusual market conditions.
Comments
I am amazed that it has been
I am amazed that it has been claimed that HIPs have prevented failed conveyancing transactions. I have over 20 years' conveyancing experience, and can honestly say that they have not made any difference to the process in any way, except for being a nuisance. Local Searches are only valid for 3 months, so have to be renewed at the Buyer's expense, and most Firms, like myself, do not rely on the Local Searches provided in the HIPs in any event. No-one looks at the EPC, and this document does not put Buyers off buying their dream property. It is interesting that these claims are being made by the HIP providers themselves, it is obviously of benefit to them financially. It is certainly not of any benefit to Solicitors or their Buyer clients. Transactions fail for many other reasons other than HIPs, not once have I acted for a client where a sale or purchase has fallen through merely because of a HIP or lack of one. When clients ask of the benefits of HIPs, I find it difficult to suggest any at all. I agree most strongly with the Law Society Chairman, Richard Barnett.
Anon
We produce our own HIPs
We produce our own HIPs purely as a means to an end, keeping as much of the conveyancing process in-house. It means we appeal more to clients and agents, we hope!
Clients, estate agents and all involved here feel they slow the initial marketing down, add to expense, and result in most searches being done twice, partly due to current market conditions and partly because HIPs are unregulated - despite insurance, conveyancers would trust a HIP as far as they could fly one.
I suspect 'HIPs reduce failed transactions' is a tagline created by those in the HIP 'industry', rather than any meaningful research.
Energy certificate is worthwhile, but should be done after point of sale, so the new owner gets maximum encouragement to improve the property. The rest of the HIP is never asked for by buyers, and if it is, they don't know what they are looking at anyway.
Another agreement for the Law Society view here I'm afraid. HIPs RIP! Roll on elections.
Its a matter of reliance
HIPs would become more effective if the buyer's conveyancers relied on them and demanded that they be kept current and fleshed out further.
Conveyancers do not rely on them because their validity in the court of law, as documents providing information on the validity/marketability of a title, remains suspect.
It would probably take a court desicion to finally allow conveyancers to properly use HIPs.
HIPs
The claim that HIPs have reduced the number of failed transactions is certainly not borne out by our experiences. None of our clients, literally, ever look at them; all they do is add a further layer of complication and expense to the conveyancing process.
And where did this much-quoted figure of nearly one in four transactions previously falling through actually come from? I thought at the time that was government spin, produced to justify the introduction of HIPs since there was little else to commend them. Again, our own experience in many years of undertaking residential conveyancing prior to HIPs was a failure rate of maybe 10% at the most, and the majority of those tended to fall through in the very early stages anyway, before anyone had become too committed or run up substantial costs.
The sooner they are abolished the better.
HIPs
I am a retired Licensed Conveyancer since May 2009. Up to that point I agree wholeheartedly with Nick Hutchinson. None of my clients had seen a Hip when they instructed me on a purchase and expressed little or no interest. The same with clients selling. Likewise neither expressed any interest in the EPC. If they wanted a house they would buy it regardless. As soon as the survey became optional (and I realise why - lenders would not accept it and it would not have included a valuation anyway) the whole thing became pointless.
HIPs
I am a retired Licensed Conveyancer since May 2009. Up to that point I agree wholeheartedly with Nick Hutchinson. None of my clients had seen a Hip when they instructed me on a purchase and expressed little or no interest. The same with clients selling. Likewise neither expressed any interest in the EPC. If they wanted a house they would buy it regardless. As soon as the survey became optional (and I realise why - lenders would not accept it and it would not have included a valuation anyway) the whole thing became pointless.
Lies and statistics...
Yet again the self-serving Home Information Pack industry has plundered the depths of more statistics to support their non-entity of a product, a creature of statute alone and serving no purpose in the real world. Delays in receiving the Home Information Pack from the providers is legendary, and not a single client claims to have seen the pack before putting in an offer and agreeing a price STC. There are, of course, many other more valid reasons why transactions may have speeded up in the last year:
1. Average number of cases per solicitor are down due to the property-led recession, hence solicitors are more able to deal with correspondence immediately on receipt.
2. The further expansion of conveyancing factories, who do not always trouble themselves with raising enquiries about a property and trust to luck in the process.
3. The increase in the number of firms using Land Registry Direct (including Land Registry Portal) to obtain copy documentation, rather than applying by post.
4. The decrease in the demand for local searches, leading to a reduction in delivery schedules for local authorities.
5. Greater use of email between solicitors, prompted in part by another postal strike.
Every solicitor in the industry knows that the average time taken for transactions has reduced despite HIPs, not because of them. The Law Society should make the case again for scrapping them, rather than peddling to this marketing drivel peddled by unqualified HIP-merchants.
The advent of HIPs has done nothing but cause annoyance and frustration to solicitors and estate agents everywhere.
HIPS
This is all due to that odious individual Yvette Cooper! The sooner she and her odious side kick, Ed Balls are out of government and out of Parliament the better.
HIPs reduce failed transactions - utter nonsense!
Daniel Stanton, spot on. Take note Government.
No buyer looks at them before an offer is made.
Let us be clear. HIPs can save time as they can come with a local authority search. However, in the majority of cases, all good conveyancers know that the main delay in a conveyancing transaction (apart from the conveyancing factories who will always slow the chain down) is the need for a mortgage offer, so there is always time to get a local search – no saving of time – only the advantage of a HIP being the saving of a Buyer’s money.
That said, there are a lot of lawyers who will spend a buyers money again (often without taking instructions) as they do not like to accept personal searches. So no time saving, or no saving to a Buyer. I totally agree that the government should ban personal searches, but at the moment, most HIPs are done with them so it will be hard for a court to set the test of negligence at a requirement to accept an official search where the government chose not to legislate for it.
HIPs do have an indirect benefit. They cost money so ‘toe in the water sellers’ are indeed put off and less transactions go nowhere. Hardly a ringing endorsement of the HIP content though.
The EPC is tripe, the index and sale statement speak for themselves, and the drainage search, well fine, but hardly another endorsement of having HIPs.
(Who said Local Searches are only valid for 3 months? Nonsense. 6 months at time of completion.)
Exchange-ready packs. There is no such thing. There is no buyer’s mortgage offer, no guarantee that everyone in the chain has an ‘exchange-ready’ HIP too. Just one lawyer thinks they have put enough in to satisfy a Buyer. But how many selling lawyers actually examine their own clients title safe enough to warrant title. None. No lawyer would. So exchange ready HIPs are a non-starter.
• Should HIPs be abolished? No, and the law Society and solicitors alike should protect their vested interests (heck CML do all the time) just altered in content, as they give solicitors the earliest connection to a client that they have had in years.
• Should personal searches be banned?Yes – Government take note.
• Should providers of HIPs be limited to law firms? Yes, as they are legal packs designed to speed up a legal process and by definition, anyone who is not a lawyer should step back, as they are getting in the way.
• Should there be a set price? No, but you should pay not more than £300 for one.
HIPS
As a conveyancing solicitor I am not surprised by the comments made on this article and that I agree with all of them. What does surprise me however is that our own publication should run such a biased article propagating nonsense from HIP providers who have a vested interest.
HIPs Confusion
The Law Society reaction to HIPs has always been remarkably inconsistent. One moment trying to sell them to the profession. The next agreeing with Kirstie Allsop that they are rubbish. No wonder the Gazette veers from one view to the other.
Cow claims that vegetarianism
Cow claims that vegetarianism is good.