As most people will have heard by now, the controversial HIPs have now been suspended. You are therefore not required to have a HIPs pack when you put your property on the market. The EPC will remain though since it is part of European Union legislation. You must therefore commission an EPC when you market your property.
How will abolishing HIPs affect Sellers?
Since sellers no longer have to take out a HIPs pack when they sell their home, they will save a few hundred pounds which, no doubt, will be pleasing news indeed. It also means that Sellers will market their properties more readily, now knowing that it is not going to cost them anything. If sellers wish to withdraw from a sale they can do so with the knowledge that they will not have to pay for further local searches on a property once they become out of date since paying for local searches has gone back to becoming the responsibility of the buyer. It has been argued that abolishing HIPs will encourage more sellers to put their properties on the market. This will obviously hep the property market so in that sense it is good news.
But what about Buyers?
Unfortunately, abolishing the HIPs is not good news from a Buyer’s point of view. The HIPs were introduced so as to provide the buyer with a comprehensive and informative pack of documents relating to the property with a view to speeding up the home buying process. HIPs have struggled to fulfil their duties as they came fraught with problems.
Now that HIPs have gone, buyers must pay for local searches which can cost a few hundred pounds. Some sellers were put off marketing their properties because of the additional cost of the HIPs packs but it was argued that this deterred none genuine sellers from marketing their properties only to pull out later on. As sellers do not have to pay for searches or really anything once they market their property, more properties will probably come on to the market including those from sellers who are not completely committed to selling their properties but simply wish to see ‘what might happen. ’ So, although more properties may appear on the market, with that, there will be a higher risk to buyers of sellers pulling out.
Buyers have therefore gone back to bearing the burden of the costs of local searches (which should be updated every 6 months or so ) and also running the risk of sellers pulling out at the last minute.
At least HIPs packs afforded some protection to Buyers against non-genuine sellers and substantial cost of conveyancing.
It will be interesting to see over the coming months whether there is to be alternative to the HIPs pack.