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.