Government Climbdown Over Home Condition Reports

Law firms across the country have welcomed the announcement of a Government climb-down on Home Information Packs (HIPs).

HIPs have been on the Government's agenda for some years now, with their adoption nationally planned for 2007. A HIP will contain two principal elements - a Home Condition Report (HCR), outlining the condition of the property, and a package showing the title deeds, searches and rights over the property. The idea behind the HIP has ostensibly been to speed up the conveyancing process by having ready and available from the seller at the outset all the information that is currently obtained and paid for by the buyer (which takes time). The HIP is also intended to reduce the financial risk for buyers, who can currently find themselves out of pocket if the deal does not go through.

A 'trial run' was carried out in Bristol a few years ago with mixed results and the Law Society is sponsoring a second trial run at present. Despite all the positive spin put on HIPs by the Government, there was a great deal of disquiet voiced by the legal profession and by mortgage lenders. Solicitors have been concerned that the compulsory HCR would disrupt the house buying process because buyers could not sensibly rely on a survey commissioned and paid for by the seller. The Council of Mortgage Lenders expressed disquiet that the HCR as proposed would not fully satisfy their needs for offering mortgages.

In a bid to calm the fears of the professionals, the Government has announced that it will be introducing the HCR element of the HIP only in limited form when the scheme is scheduled to commence nationally next June. The HIP will now contain only the energy efficiency report section of the HCR. Although the announcement of the change has been widely welcomed, the Government is determined to bring in the 'full' HCR once an acceptable compromise can be reached with the bodies representing those who will need to rely on them.