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HIPs will be bought by the vendor, rather than the purchaser, and will include a local search and home condition report based on a professional survey; title docu- ments; copies of any planning consents; warranties and guarantees if it is a new property; and a draft contract.The theory is that having all this information available right from the start will reduce the number of sales that fall through as buyers will be fully informed about the state of the property when they put in an offer. At the moment, deals that collapse often do so because the survey uncovers a major problem that the buyer had previously been unaware of.”The buying and selling process in England and Wales is plagued by delay, uncertainty and failure,” says housing minister Tony McNulty. “Nearly 30 per cent of transactions fail after terms have been agreed, and this costs home buyers and sellers up to £350m each year in wasted expenditure.”The key problem is that important information needed by buyers and sellers only becomes available after terms have been negotiated and agreed. It is hardly surprising that terms negotiated without full information about the property come unstuck, causing waste and misery.”The idea of introducing HIPs is not a new one. In its last term, the Government planned to bring in the scheme but ran out of time, although HIPs were then called Seller’s Packs.Following the publication of the new proposals, there will be a 10-week consultation period before the Bill is put before Parliament. It is then likely to be a couple of years before HIPs are introduced – 2006 is the Government’s target. What has yet to be decided is how HIPs will be implemented and how much it will cost.It is thought that a HIP will cost the seller around £600 and while this may seem expensive, the Government is keen to stress that it does not represent an additional cost.

While there is a shift in onus from buyer to seller under the proposed new scheme – it’s the buyer who pays for the survey at the moment – the Government argues that since most vendors will also be looking for a new property, their costs will be balanced out further down the chain.One group that seems set to benefit from the introduction of HIPs is first-time buyers. As they won’t need to pay for a survey, their costs should be significantly reduced. “We’re very much in favour of home information packs and think they’ll be of particular benefit to first-time buyers,” says Jane Pridgeon, managing director of Halifax Estate Agents. “These people tend to buy cheaper homes which are often properties with problems, but they don’t discover this until they’ve had the survey.”On average, first-time buyers pay for three surveys before they find the property that they finally purchase. But once HIPs are introduced the survey information will be available upfront.However, while the HIP proposition is generally welcomed, there are some concerns, one of which revolves around the survey.

Some groups are worried that buyers won’t feel they can rely on a home condition report that has been commissioned by the vendor. As a result, they might pay for their own survey anyway.Additionally, mortgage lenders may have similar reservations and be reluctant to make an offer based on the seller’s survey. Consequently, the Council of Mortgage Lenders (CML) is contributing to the working groups looking at HIPs and calling for lenders to be able to devise their own valuation system if they wish.But Peter Bray, managing director of BBG surveyors, believes there is no need for concern about the objectivity of the home condition reports. “Home inspectors will not be, as such, appointed by the seller; they’ll be working for the Crown – a bit like an expert witness in a court,” he says “They will also be liable. So, from the point of view of surveyors, they can’t afford to obscure the report.”Mr Bray adds that, as an industry, surveyors will be looking at ways of increasing that sense of reassurance over the next few years.

For example, BBG already includes a hidden defects warranty on its surveys so that should any problems emerge that were not picked up in the report, BBG would cover the cost up to £50,000.Jeremy Priestly, chief operating officer of estate agent Hamptons International, also believes that having a survey available from the beginning can often work in the buyer’s favour. “I’ve always found them particularly useful documents to negotiate a price reduction,” he says.However, there are also some fears that HIPs could significantly weaken the property market. Richard Donnell, housing market analyst at estate agent FPD Savills, is concerned that we could see increased levels of gazumping.At the moment, he says, many potential sellers dip their toe into the market to see what will happen. If they can sell their property quickly then they’ll move, but if not, they’re happy to stay put. However, if vendors have to get an HIP before they can sell, Mr Donnell believes that many people will be put off, which, in turn, could lead to a shortage of properties.”Our housing market is small and inefficient enough as it is without reducing availability even more,” he says.