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Brits 'confused' by Hips

13th December 2006 | back to article listings BACK    print this article PRINT

Even thought they are due to become law next year, a third of homeowners do not know what home information packs (Hips) are, it has been revealed in a new survey which suggests Britons' ignorance when it comes to the housing market.

Many respondents to the survey, which was carried out by the Council for National Land Information Service (C-NLIS), were confused as to who would have to pay for the packs; 15 per cent believed that estate agents would have to cough up, while 29 per cent thought that buyers would foot the bill.

Furthermore, over half of those questioned in the survey were unaware of what they were paying for in a local property search and a fifth believed that it would be a viable option to ask an estate agent to carry out conveyancing.

"It is quite concerning that the general public do not seem to have an understanding of these issues," commented Alex Fraser, chief executive of C-NLIS.

"Buying a house and signing up to a mortgage is possibly the largest financial commitment we make in our lives, and yet the sheer number of people who do not fully understand the basic terms and processes is very worrying."

Homeowners in various towns and cities around the country are carrying out trials of the packs and the government is making them available for free in an effort to encourage to use the new method of house buying.

Hips include evidence of title, copies of planning, listed building or building regulations consents, a local search, guarantees for work done on the property and an energy performance certificate.

If the trial runs smoothly, Hips will become obligatory for all sellers by June 2007.

However, critics have continually knocked the management of the scheme, saying that the costs involved in accumulating the data to go into the packs are not compensated by an increase in speed of transactions.

Such a scheme may be necessary to grease the cogs of the housing market, especially if predictions for a long-term slowdown ring true.

In new research published today, the Council of Mortgage Lenders (CML) said that it expects prices to rise by seven per cent next year but this figure should fall back to five per cent in 2008.

Correspondingly the CML expects the number of transactions to tall from 1.19 million in 2007 to 1.13 million the following year.

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