The scaremongers got it wrong on sellers' packs but we're not home and dry yet

While a cost of around £300 is not what the critics had predicted, writes Laura Howard, HIPs may still pose problems for the unwary vendor
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The Independent Online

They may have launched to a barrage of criticism last August but home information packs are here to stay. And while vendors trying to sell their house this spring may have deeper concerns than compiling a report on their property – not least a lack of buyers – it will still be on their "to do" list because all homeowners in England and Wales now need to apply for a HIP before the "for sale" sign can go up. So what do they need to know?

First, the cost of a HIP may not hit the purse as hard as some people had feared. According to trade body the Association of Home Information Pack Providers (AHIPP), the average cost of a pack now stands at around £300 plus VAT – a far cry from the £700 to £800 that was being bandied around by HIP opponents prior to the launch.

"These estimates were

nothing short of ridiculous," says Dominic Toller, marketing director at LMS, which provides packs to Halifax Estate Agents. "At £299 plus VAT, consumers are pleasantly surprised. What's more, this is not an incremental cost – rather a substitution for what you would have paid further down the line as a buyer – for example, the searches and now the energy performance certificate on the new property."

And you don't have to pay upfront. Jeff Smith is chief executive at HIP Payment Services, which provides a "credit" channel to pack providers including LMS, Simply HIP and PSG. This offers sellers the chance to obtain a HIP immediately but settle up only when the property is sold. "Prices of packs will vary according to the provider, but if it costs £320 upfront, to defer payment might cost £360."

But sellers should be wary of what is meant by "'when the property is sold". With HIP Payment Services, this used to refer to completion – when the funds actually become available. But last month it was brought forward to exchange – a point at which the seller is no richer. "We do allow a grace period of 10 days, by which time many people have reached completion anyway," says Mr Smith.

Paying for your HIP upfront has other advantages. Sellers who defer payment cannot switch agents or take their home off the market without being liable for the full deferred cost of the pack. And if the home is not sold in 10 months, they will have to cough up regardless.

Most sellers obtain their pack via their estate agent but there is no obligation, and some providers are better than others, says Mike Ockenden, director-general at AHIPP. "However they obtain their pack, consumers should check the provider subscribes to the HIPs code. This means it will provide redress if you are unhappy with the product or service." All firms listed on the AHIPP site (www.hipassociation.co.uk)are subscribers to the code and account for 80 to 85 per cent of the market.

The twists and turns of HIPs are not over yet. From May this year, for example, the Government had intended to put an end to the provision under which properties can be advertised for sale once a seller has applied for a pack, rather than actually received it. This rule change is now expected at the end of the year.

But to roll this clause out at any time would be "outrageous", says Nick Salmon of anti-HIP campaign group Splinta. "Having to wait for a pack before putting your home up for sale would be very detrimental in an already fragile market."

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