What is a HIP?

The 2004 Housing Act was the legislation that introduced HIPs to selling process. Previously known as  a Seller's Pack, a HIP must be provided before a property in England and Wales can marketed. A HIP is a set of conveyancing documents ( save for the EPC ) about the property: an Energy Performance Certificate, local searches, title documents, guarantees, etc..

There have been delays to the introduction of HIPs as well as changing requirements, but then on the 1st August 2007 the first stage of the HIPS was launched. As of that date all 4 bedroom ( plus ) houses  had to have a HIP before being marketed. The roll-out approach continued on 10th September, by which time all 3 bed houses had to have a HIP before being placed on the market. Then it was announced that from 14th December  2007 onwards all properties must have a HIP.As of April 6, 2009, all newly commissioned HIPs must contain a Property Information Questionnaire (PIQ).

The Government theorised  that HIPs would lead to a reduction in the number of abortive conveyancing. Despite vocal opposition from the building industry and estate agents, as well chartered surveyors HIPs were nevertheless introduced. There are claims that the HIPs have contributed to the 2008 housing crisis by deterring sellers from marketing their houses due to the additional costs involved in the survey. As the months have gone by if is generally accepted that the causes of the crash were somewhat more complicated than the introduction of HIPs and PIQs.

The justification for the HIPs evolved over time. The 1997 Labour manifesto first proposed solution  to address the problem of gazumping but was also raised  by the Torries in the early 1990’s.  After the 1998 election research revealed that around 28% of sales fell before exchange of contracts, with gazumping occurring in fewer than 2% of sales. The emphasis subsequently moved to the benefits of increased conveyancing speed, transparency and consumer friendliness. The idea is based on similar practice for HIPs used in Denmark and New South Wales, Australia. The Government has even abandoned the original intention of the HIPss, Rather, cynics say that  it sought to give HIPs a spurious cloak  of environmental legitimacy by insisting they contain information about energy-efficiency levels. The main advocate for HIPs was the consumer group Which who welcomed the chance to improve the buying and selling process, which costs around £1m a day in wasted conveyancing fees.

Home Information Packs were announced in the Queen's Speech in November 2003. By 2006 a number of organisations had expressed an interest in running certification schemes and over 3,000 people were already going through training for the home inspector qualification. Conveyancing lawyers were not central to the certification schemes.  In June 2006 draft regulations were made setting out the detailed contents of HIPs, rules governing the availability of HIPs, exceptions from HIP duties and arrangements for enforcement.

In June 2007 the Labour government  subsidised 5000 HIPsby £100 prior to the official launch date of August 1, 2007. The subsidy did not cover any conveyancing.

First Day Marketing is a phrase used to denote the mandatory requirement to make available all of the conveyancing documents and EPC required within a HIP on the first day a home is marketed to the public. Initially, the date was set for the requirement to commence on 31st December 2007 but was delayed until 1st June 2008 to allow a period of transition. A home can be marketed during this time providing a commitment to pay for a HIP - including the EPC - is made and the necessary documents have a reasonable expectation of being made available within 28 days. On May 8th, 2008, the then Housing Minister, announced a further delay to first day marketing until 31st December 2008 and then Margaret  Beckett. suspended HIPs further until April 6th 2009.