At a time when the future of the home information pack looks rather gloomy it is perhaps helpful to remember and remind ourselves of the background to, and reasons behind the establishment of the HIP.
In fact the HIP has its roots in a cycle of ‘boom and bust’ similar to that recently witnessed. It was following the housing boom of the late 1980s and the subsequent housing market recession of 1991-93, the then Labour opposition began to consider whether fundamental reform was needed in the housing market. This finally took expression in the Labour Party manifesto in 1997 which stated: "The problems of gazumping have reappeared. Those who break their bargains should be liable to pay the costs inflicted on others, in particular, legal and survey costs. We are consulting on the best way of tackling the problems of gazumping in the interests of responsible home buyers and sellers."
Upon election to Government Labour found following research that the current home sales process was wasteful and inefficient with around 28% of agreed transactions falling through between acceptance of the offer and exchange of contracts. As the then Minister of State, Jeff Rooker commented (28/12/2002): "Sellers' Packs will make the home- buying and selling process more transparent, faster and consumer friendly. They will reduce the stress and wasted costs suffered by hundreds of thousands of consumers each year."
Details of proposals for HIPs were published for consultation in "The key to easier home buying and selling' (DETR, 1998) and in chapter 4 of the Housing Green Paper 'Quality and choice: A decent home for all" (DETR, 2000a). This policy was confirmed in chapter 2 of the subsequent Housing Policy Statement "The way forward for housing" (DETR, 2000b). A pilot study in Bristol (ODPM, 2001) examined the practicality of HIPs although the number of packs evaluated was small. There was widespread criticism of the proposals but, despite that, the Government introduced a Homes Bill in 2000 that would have made a seller's pack mandatory. The Bill ran out of time as a result of the general election in May 2001. The Labour party reaffirmed its commitment to introduce a seller's pack in its manifesto and when re-elected consulted further on proposals for a HIP as part of a wider Housing Bill in March 2003. The Housing Bill was introduced in November 2003 and became an Act in 2004.
The Government faced a number of choices when it set about reforming the transaction process. These included the use of a binding contract over buyers and sellers, requiring lenders to provide faster mortgage offers and encouraging greater use of information technology to speed up the process. However, the Government took the view that ensuring buyers were better informed about the property they were purchasing would be the most practical way forward. A particular issue was the condition of the property. Only 20-25% of home buyers commissioned their own surveys before completing a purchase and it was felt that better information on condition in particular would improve price bargaining and make for a more efficient market.
The Government argued that HIPs would:
• Enable buyers and sellers to negotiate from an informed position;
• Increase openness and transparency, helping to make the process less adversarial and stressful;
• Help the parties commit more quickly to the transaction, shortening the period of uncertainty between acceptance of an offer and exchange of contracts;
• Increase certainty by avoiding unwelcome surprises which currently cause renegotiation and transaction failures after terms have been agreed;
• Reduce wasted costs resulting from high rates of failed transactions; and
• Help shorten the overall transaction timescale.
The Government's resolve to introduce legislation has been strongly tested. Although it was an original commitment was made in 1997 it was not until 2004 that legislation was introduced and passed.
It took this time as Government came across much resistance. This is not surprising given reform to the housing market has never over the centuries proved easy. However, it survived partly because the Government felt that despite the arguments being posed by solicitors and estate agents against reform, popular support remained very strong with the Department of Communities and Local Government, (or Department for the Environment, Transport and the Regions (DETR) as it was then), experiencing its biggest ever post bag of public support for the reforms when they were announced.
In March 2006 the government gave the go-ahead for multiple certification schemes. In June 2006 draft regulations were made setting out the detailed contents of Home Information Packs, rules governing the availability of packs, exceptions from the pack duties and arrangements for enforcement.
Originally the HIP was going to be required from June 1, 2007. However, just ten days before that date, Communities Secretary Ms Kelly announced that they would be phased in from August 2007, and initially only for larger properties. Between 1 August and 10 September only homes marketed with four or more bedrooms were legally required to have an HIP. This was extended to cover homes with three or more bedrooms from September 10.
On November 22, the then Housing Minister Yvette Cooper announced that HIPs would be rolled out to include one and two bedroom properties as of December 14, completing the Government's phased introduction of Home Information Packs to residential homes marketed for sale within England and Wales.
A chequered history! However we are now here with an established industry through which the consumer is beginning to see and benefit from the delivery of the original objectives of greater certainty and transparency as well as shorter transaction times. After taking so long to get where we are it would be a travesty to be thrown back into the dark ages. We should learn from the lesson this history discloses, that is, irrespective of stakeholder self interest and the general lack of support for change within certain camps, at the end of the day it is the consumer that has and continues to be totally disillusioned with the home selling and buying process. The political party that tunes into this vein of feeling will be the party that has a greater chance of winning support for housing policy. At the end of the day the HIP informed consumer ‘gets’ the objective of the HIP and given the choice would retain the HIP providing it could be used as a basis for reform.
In fact the HIP has its roots in a cycle of ‘boom and bust’ similar to that recently witnessed. It was following the housing boom of the late 1980s and the subsequent housing market recession of 1991-93, the then Labour opposition began to consider whether fundamental reform was needed in the housing market. This finally took expression in the Labour Party manifesto in 1997 which stated: "The problems of gazumping have reappeared. Those who break their bargains should be liable to pay the costs inflicted on others, in particular, legal and survey costs. We are consulting on the best way of tackling the problems of gazumping in the interests of responsible home buyers and sellers."
Upon election to Government Labour found following research that the current home sales process was wasteful and inefficient with around 28% of agreed transactions falling through between acceptance of the offer and exchange of contracts. As the then Minister of State, Jeff Rooker commented (28/12/2002): "Sellers' Packs will make the home- buying and selling process more transparent, faster and consumer friendly. They will reduce the stress and wasted costs suffered by hundreds of thousands of consumers each year."
Details of proposals for HIPs were published for consultation in "The key to easier home buying and selling' (DETR, 1998) and in chapter 4 of the Housing Green Paper 'Quality and choice: A decent home for all" (DETR, 2000a). This policy was confirmed in chapter 2 of the subsequent Housing Policy Statement "The way forward for housing" (DETR, 2000b). A pilot study in Bristol (ODPM, 2001) examined the practicality of HIPs although the number of packs evaluated was small. There was widespread criticism of the proposals but, despite that, the Government introduced a Homes Bill in 2000 that would have made a seller's pack mandatory. The Bill ran out of time as a result of the general election in May 2001. The Labour party reaffirmed its commitment to introduce a seller's pack in its manifesto and when re-elected consulted further on proposals for a HIP as part of a wider Housing Bill in March 2003. The Housing Bill was introduced in November 2003 and became an Act in 2004.
The Government faced a number of choices when it set about reforming the transaction process. These included the use of a binding contract over buyers and sellers, requiring lenders to provide faster mortgage offers and encouraging greater use of information technology to speed up the process. However, the Government took the view that ensuring buyers were better informed about the property they were purchasing would be the most practical way forward. A particular issue was the condition of the property. Only 20-25% of home buyers commissioned their own surveys before completing a purchase and it was felt that better information on condition in particular would improve price bargaining and make for a more efficient market.
The Government argued that HIPs would:
• Enable buyers and sellers to negotiate from an informed position;
• Increase openness and transparency, helping to make the process less adversarial and stressful;
• Help the parties commit more quickly to the transaction, shortening the period of uncertainty between acceptance of an offer and exchange of contracts;
• Increase certainty by avoiding unwelcome surprises which currently cause renegotiation and transaction failures after terms have been agreed;
• Reduce wasted costs resulting from high rates of failed transactions; and
• Help shorten the overall transaction timescale.
The Government's resolve to introduce legislation has been strongly tested. Although it was an original commitment was made in 1997 it was not until 2004 that legislation was introduced and passed.
It took this time as Government came across much resistance. This is not surprising given reform to the housing market has never over the centuries proved easy. However, it survived partly because the Government felt that despite the arguments being posed by solicitors and estate agents against reform, popular support remained very strong with the Department of Communities and Local Government, (or Department for the Environment, Transport and the Regions (DETR) as it was then), experiencing its biggest ever post bag of public support for the reforms when they were announced.
In March 2006 the government gave the go-ahead for multiple certification schemes. In June 2006 draft regulations were made setting out the detailed contents of Home Information Packs, rules governing the availability of packs, exceptions from the pack duties and arrangements for enforcement.
Originally the HIP was going to be required from June 1, 2007. However, just ten days before that date, Communities Secretary Ms Kelly announced that they would be phased in from August 2007, and initially only for larger properties. Between 1 August and 10 September only homes marketed with four or more bedrooms were legally required to have an HIP. This was extended to cover homes with three or more bedrooms from September 10.
On November 22, the then Housing Minister Yvette Cooper announced that HIPs would be rolled out to include one and two bedroom properties as of December 14, completing the Government's phased introduction of Home Information Packs to residential homes marketed for sale within England and Wales.
A chequered history! However we are now here with an established industry through which the consumer is beginning to see and benefit from the delivery of the original objectives of greater certainty and transparency as well as shorter transaction times. After taking so long to get where we are it would be a travesty to be thrown back into the dark ages. We should learn from the lesson this history discloses, that is, irrespective of stakeholder self interest and the general lack of support for change within certain camps, at the end of the day it is the consumer that has and continues to be totally disillusioned with the home selling and buying process. The political party that tunes into this vein of feeling will be the party that has a greater chance of winning support for housing policy. At the end of the day the HIP informed consumer ‘gets’ the objective of the HIP and given the choice would retain the HIP providing it could be used as a basis for reform.
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