Expertconveyancing.com’s Blog

The Tories claim they will scrap Home Information Packs, and trade bodies say house sales are being jeopardised by vendors refusing to provide them. Graham Norwood wonders if they can survive.

Estate agents are being accused of putting house sales at risk by ignoring the law on Home Information Packs and marketing homes before Hips are prepared.

A trade body, the Association of Hip Providers (Ahipp), says mystery shopping exercises at estate agents’ offices in three London boroughs show at least 80 homes for sale without packs.

The body claims four council trading standards departments across the UK have issued fixed penalty notices on estate agents – the official sanction for breaching pack legislation – and says some councils are reporting offending agents to the Office of Fair Trading.

The packs include title deeds, search information and energy efficiency data about the property for sale, and must be commissioned by the seller before a home goes on the market. Those who start marketing a home without a Hip in place can be fined up to £200 a day, and if a purchaser’s conveyancing solicitor discovers the pack is missing the sale will fall through.

Ahipp says some estate agents are “openly flouting the law” adding that the penalties served so far are the tip of the iceberg and there are “many more to come.”

“This is not about the rights and wrongs of Hips but about some agents trying to attain a perceived advantage over their competitors by listing properties without Hips. It is perverse, even absurd, that law breakers should be able to get away with this,” says Mike Ockenden of Ahipp.

Hips were introduced in England and Wales in 2007 to provide more “up front” information for buyers. Before them some 28% of sales fell through, often because of problems discovered late in the purchase process.

But despite a decade of debate between the government and the property industry before the packs’ introduction, they have been vigorously opposed by estate agents. The packs have also been criticised by Location, Location, Location presenter and Conservative party housing adviser Kirstie Allsopp. The Tories have vowed to scrap Hips “within weeks” of taking office should the party win the spring general election.

Meanwhile, consumer groups have withdrawn support for Hips because the packs do not include a compulsory survey. This was likely to have been the most useful part of the pack for would-be buyers, who would otherwise not know of a major problem with the home they wanted until late in the transaction process. But the survey was pulled from the packs by the government after opposition from estate agents.

Consumer groups say the system in Scotland works far better. There, the new Home Report system introduced in December 2008 contains only three documents – an energy assessment, an independent valuation and a survey of the property – compared with the seven documents in the Hips used in England and Wales.

Many of those who criticised the Scottish system when it was introduced now support the reports, but south of the border few property professionals have come out for Hips.

“Our view is that the vendor and his agent should put the house in some kind of order before it is offered for sale. It’s frustrating to spend weeks on negotiations and due diligence only to find a problem with the title. We would hope Hips, in some form, remain,” says James Greenwood, managing director of Stacks Property Search.

Supporters also claim that research into 3,000 sales by Connells, Britain’s third-largest estate agent, shows that Hips contributed to an average seven-day reduction in the time transactions took to complete.

However, further controversy has engulfed Hips after research by Which? showed sellers were paying as much as £300 over the odds for their packs to be prepared.

The research showed that the Halifax offered the most expensive Hip for a typical three-bedroom freehold semi-detached property, charging £413. In contrast, online provider Fridays Property Lawyers charged just £189. The research also showed the dearest pack for a two-bedroom leasehold flat was from estate agent Spicerhaart at £516 – more than £290 dearer than the cheapest option from Hip Save.

Which? found that companies that specialised in preparing packs were generally cheaper than estate agents who offered the service in addition to their sales and marketing of the property. Even so, prices varied widely between direct providers, with some almost £200 dearer than others.

The fear among some in the property industry is that if the Tories remain favourites to win the election, some estate agents will not commission Hips on homes prepared for sale shortly before polling day in the belief that they will no longer be needed.

“That’s unwise,” says a spokesman for the Department of Communities and Local Government, adding: “The law is the law until a new one is in place, and that may take months or years, even supposing there is a change of government.”

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With prices rising all over the country, and the UK now out of recession, we could be forgiven for thinking that we’ve made it through the worst. But it seems that first-time buyers are doomed to be shut out of the housing market recovery altogether because of the difficulty in securing the funds to buy a home.

Here, ten experts give their top tips on how individuals can get onto the property ladder:

1. Karen Barrett, chief executive of Unbiased.co.uk
“Over the last two years, consumers have watched on as the property market slowed down, lenders tightened their lending criteria and the amount needed for a house deposit soared. As a result, many first time buyers have been left worrying as to whether they’ll ever have their feet firmly on the property ladder. Seeking advice from a qualified and whole of market mortgage adviser will provide you with the information and help you need. Visit Unbiased.co.uk’s ‘find a mortgage adviser’ search to find an adviser who you trust and who specialises in first time buyers.

“Our Advice Driver statistics show first time buying to be the most popular search criteria for consumers seeking mortgage advice, totalling an average of 40% of searches on Unbiased.co.uk’s ‘find a mortgage adviser’ service.  Consumers should also ensure they seek advice from a qualified solicitor who specialises in conveyancing, by visiting Unbiased.co.uk’s ‘find a solicitor’.”

Most solicitors firms will be accustomed to dealing with insolvency; however an increasing number may be seeing it from the other side in the upcoming year, according to an expert. 

What is a HIP report? What should you pay for one and is it worth it?

You are now required by law to have a Home Information Pack, now referred to as a HIP report, if you want to sell your house.

The idea of a HIP report is to give your prospective buyers a detailed report on how energy efficient your property is and other useful basic property information that may be of use to your 
conveyancing solicitor.

Today your estate agency cannot and must not advertise or market your property in any way at all, even by word of mouth, to any prospective buyers until your HIP report is completed.

A spokesperson for http://www.freeconveyancingquotes.co.uk said; “The primary goal of a HIP report is to speed up the conveyancing process by giving everyone involved the information needed about each property.”

Your HIP report should contain the following information;

Property Information Questionaire
Performance Certificate (EPC)
Sale Statement
Evidence of title – documents that prove the property is yours to sell – and standard searches.
Leasehold properties – a copy of the lease is also needed.

“A Home Condition Report may also speed up the conveyancing process but this is not guaranteed with every HIP report.”

“Prices vary a great deal so be sure to shop around and find the best price. You should look to be paying around £200 – £300 + VAT and no more.”

That well-known source of reliable information, Wikipedia, helpfully says that there is no generally accepted definition of the word ‘recession’.  However, I think it reasonable to accept that it is a sustained period of economic downturn. I understand that partners in some City firms have suffered diminution in their profit shares from seven figures down to six figures. Poor things. Those of us elsewhere in the country have experienced reductions in profit shares from something to nothing or worse. Indeed, there are solicitors who have found that their firms can no longer afford to keep them, or which have ceased to exist. Long-standing and good names have gone.

A lot has been learnt this year, but a lot more could be learned. Christmas comes but once a year. A time at least this year for reflection. For consideration of both what has passed and what is to come in terms of professional practice.

As ever, there have been changes, but relatively few that have any substantial effect on the profession. While legal publications will proclaim, or more frequently whinge, about changes to the way we practise, remarkably little of substance seems to change. Things go on as they always have, for better or worse. However, the firms who are proactive and take matters into their own hands will survive and thrive in the present and near future.

My firm has sent one partner on the business growth and development programme at Cranfield University and it is about to send a second. This is to bridge the gap between what trainees learn and what is actually needed to run a modern business. Even our most recently qualified solicitors have little idea how to run a business. And what we are doing in general practice is running a business.

Despite the Law Society’s latest announcement to try and ban them, it is unlikely that the current system of paying referral fees to introducers of conveyancing work will happen, according to OpenConvey.

This is because the expectations of consumers have moved on and a ban would leave solicitors even more isolated from potential clients, according to Steve Maine, managing director of OpenConvey, the online conveyancing referral portal.

He said, “It is a shame that the Law Society has seen fit to sabre rattle about banning referral fees, when clearly it should have consulted the many legal firms for whom referral fees are working and where, more importantly, there is no downside for the client, unless receiving a robust and cost effective service is now considered detrimental. Paying referral fees to business introducers is no different than paying for advertising. Regardless of the sensibilities of some Law Society members, the stark truth is that thankfully this side of legal representation is now subject to the same laws of supply and demand as any other service and while it might seem to have commoditised part of the profession, conveyancing has become slicker, cheaper and more representative of what consumers want, than was available in the past.”

Professor Donald MacRae has declared a recovery in the Scottish housing market.

The chief economist at Lloyds TSB Scotland is a cautious Black Isler, so he’s not saying if it’s going to last.

That’s probably wise. But at least the most recent Lloyds TSB Scotland price monitor, published this morning, provides some respite from tough times in the property market.

It’s showing a rise of 0.7% in the quarter to the end of October. Over the past year, the bank’s reckoning shows prices have fallen by 7.5%.

By its figures, there was a wobble in 2007, but the peak was reached in the second quarter of last year, and fell for four consecutive quarters since then.

This adds to evidence recently out from Halifax Bank of Scotland showing Scottish prices down 6.3% between the third quarter of 2008 and the three months to the end of September this year.

HBOS goes on to claim the drop from the UK market peak in the third quarter of 2007 is a 12% drop for Scotland, compared with a UK average of 18%.

It’s worth noting there that Scotland has by far the least drop of any region from peak to trough.

Greater London was down 24% and Northern Ireland by 32%, though the most recent year sees HBOS’s reckoning on Scotland picking up pace relative to others.

Price wobble

The crucial question is whether we’ve actually seen the trough, or if there’s another one to come after the current steadying of prices.

Another survey for the UK, carried out for FindaProperty.com, last week raised fears that we could be seeing the wobble that could herald the second part of a double dip.

Month on month the number of home loans has increased since the Stamp Duty Land Tax (SDLT) Holiday was introduced. Now, public figures and industries are calling for the holiday to be extended.

Online PR News – 27-October-2009 – Stamp Duty Holiday puts Conveyancing Solicitors in Demand
Month on month the number of home loans has increased since the Stamp Duty Land Tax (SDLT) Holiday was introduced. Now, public figures and industries are calling for the holiday to be extended.
SDLT is a tax usually incurred when you buy a house over the value of £125,000. The Government, under pressure to show decisive action during the Recession, raised the Stamp Duty Land Tax to houses over the value of £175,000. These measures are designed to help first time buyers, those on lower incomes and to stimulate the market. So far it appears to be working as the amount of mortgage lending has gone up this month.
Wolstenholmes Solicitors are a national firm that provides a Conveyancing service. They were established in 1818 and remember the last stamp duty holiday introduced during the last recession by the Major government. A spokesperson for Wolstenholmes Solicitors commented “The stamp duty holiday is good for Conveyancing business as more people are buying houses. Everyone who buys a house needs to see a professional Conveyancing solicitor.”
When the John Major government reintroduced the stamp duty, mortgage lending dropped, house prices fell and the economy suffered. Therefore Estate Agents and Conveyancing Solicitors are calling for the holiday to be extended until we are back into economic growth. Currently the offer is due to end 31st December 2009.
Wolstenholmes Solicitors commented “There are good offers to be had at the moment. If you are in a position to buy, then now is a good time. Mortgage lending is on the rise again as people take advantage of this offer, so house prices will see an increase. Additionally if you choose our Conveyancing Solicitors we can usually beat other prices as we are on line, we offer a free initial consultation and we offer No Completion No Fee. That means you won’t pay a penny if we don’t complete the transaction.”

Conveyancing Alliance Ltd, the online conveyancing distributor, has urged mortgage brokers to highlight the potential stamp duty savings available for those clients who complete their purchases before the end of 2009.

Following Government action earlier in the year, the nil band for stamp duty has been extended for property purchased up to £175k. However, this is a temporary measure with the concession expiring at the end of 2009. Therefore, to qualify for the savings property purchasers must complete their deals before the 31st December 2009.

Conveyancing Alliance is urging mortgage brokers to generate a degree of urgency amongst their clientele who are purchasing property at prices up to the £175k threshold. It points out that those who buy property for between £125k and £175k, and complete before the deadline date, will save between £1,250 and £1,750.

Harpal Singh, Managing Director of Conveyancing Alliance Ltd, commented: “With just three months remaining before the nil band stamp duty threshold returns to £125k, many purchasers looking to buy a property below £175k could make a sizeable saving if they are able to complete before the deadline. While a saving of between £1,250 and £1,750 may appear small in the context of a much larger purchase price, this still represents a considerable saving for any purchaser. However, with deals taking on average three months to complete, time is running out before the end of December and therefore it is up to all parts of the chain to ensure the process works as efficiently as possible.