Is the Exchange Ready HIPs going to save the HIP industry ?

One can not claim that the Conservatives have not been consistent in voicing their intention to ditch HIPs when they come to power.   Over 12 months the HIP lobbyists have been trying to protect have been looking  for a glimmer of hope that HIPs will not be abolished.  


Shadow Housing Minister, Grant Shapps has said over and over again that HIPs will be binned as soon as the Tories come into power.   What ever the Association of HIP Providers have to say the fact remains that HIPs are not popular.


The public believe that HIPs have not accelerated the process and sellers do not see any value in them.   Ultimately it is a clear vote winner for the Tories.   In a nation of home owners, the abolition of the HIP is pretty much deemed to be the equivalent of a tax cut.

So what are the HIP fans to do ?

Somewhat bizarrely the HIP industry seems to believe that the “ exchange ready HIP “ is the answer.   One uses the phrase “bizarrely”  due to the fact that “exchange-ready HIP ” actually undermines their credibility.  


An “exchange-ready HIP” is rare as rocking horse faeces.   A number of HIP providers already see themselves as providing an “exchange-ready HIP” but I think any expert with significant conveyancing experience will tell you that a HIP can be prepared in such a way that at the point that a buyer is found, the buyer’s property solicitors and lenders would accept that HIP and effect an immediate exchange (or indeed an exchange within a two-week timeframe).   The only exception would be if it was produced by a conveyancing practice that is able to act for both seller and buyer and were prepared to invest in approving the HIP and preparing a report on title in readiness for a buyer.  


Commercial logic makes the above exception an impossible scenario regardless of the fact that the public will be concerned about potential conflict of interest.  
What the advocates for “exchange-ready HIPs” fail to realise is that there are 138 lenders in the UK, all with different legal requirements.   For example, while one lender may accept a flying freehold property, another lender may have an absolute prohibition on lending on such properties.   Another example might be on a leasehold HIP, some lenders will lend on a property with 59 years remaining and others will not.  


In addition to this, most lawyers take differing views on legal issues in the deeds and contractual paperwork.   Some conveyancing practices like indemnity insurances to deal with defects and others detest them.


“Exchange-ready HIPs ” are purely a marketing gimmick.   The danger is that the regulators and lobbyist on behalf of the HIP industry believe in the myth then they are doing themselves no favours as if they want to convince the HIPs to keep HIPs then they need to come up with a less superficial and more weighty proposal.


by admin
Monday 14th of September 2015 09:34:29 PM