Sam Dunn: The writing's on the wall for sellers' packs
Feast and famine in the market could cause prices to fluctuate
Sunday 12 March 2006
"Sellers' packs suck."
This graffiti is being plastered all over the walls of the Government's plan to introduce Home Information Packs (HIPs), to give them their formal name, from 1 June next year.
Finding out who's got spray paint on their hands isn't difficult. Critics include such heavyweight professional bodies as the National Association of Estate Agents and the Council of Mortgage Lenders, as well as a number of national mortgage brokers.
Collectively, hundreds of individual chartered surveyors, estate agents and brokers have also fired off angry letters to Yvette Cooper, the Housing minister, demanding either changes to the packs or the scrapping of them altogether. The Conservative Party pitched in last week too, branding HIPs a "roadblock" to home ownership.
To recap, sellers' packs aim to shift responsibility for compiling and paying for surveys and searches from buyers to sellers. Cash-strapped first-time buyers would benefit in particular. The packs are expected to cost up to £1,000 a time, and should mean that buyers will no longer have to waste money on surveys and legal fees where a property sale falls through. And by speeding up the buying and selling process, they will make buyers less vulnerable to gazumping - in theory, at least.
HIPs are to comprise the following: evidence of deeds, local authority searches and a home condition report (HCR) detailing any problems with the property that could affect saleability. But, critically, there will be no property valuation. The Government says the HCR will suffice as the basis for mortgage lenders' own inspections. The growing band of detractors say it won't.
They also say sellers will just recoup HIP costs by adding them to a property's sale price, and that the cost of the packs will deter potential sellers from putting their homes up for sale. It is feared, too, that there could be a "feast" of homes hitting the market ahead of the introduction of the packs, followed by a "famine", with all the associated price fluctuations.
Amid all the arguments, those most in danger of losing out are the consumers. If concerns about the property valuation aren't ironed out by the time the house goes on the market, buyers will be forced to resort to paying for their own - undermining one of the raisons d'être of HIPs.
Worse still, the packs might actually give rise to more gazumping, as providing so much information for free could tempt someone to step in with a last-minute offer.
We might be more than a year away from its introduction, but it's looking like the HIP might need surgery - if not a replacement.
The Parliamentary Ombudsman, Ann Abraham, will publish her report on occupational pension schemes on Wednesday.
Her investigations were prompted by allegations that workers were misled about the safety of final-salary schemes in the Government's literature. Many of them have since gone bust.
Publication of Ms Abraham's report has been delayed (it should have come out last year), which critics put down to government attempts to soften the expected blows.
Wherever blame lies, somebody needs to take responsibility. Otherwise, our confidence in this Government's commitment to clearing up the pensions mess will be compromised.
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